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Additional Parties and Counsel are Listed in the Overleaf
ORAL ARGUMENT HAS NOT YET BEEN SCHEDULED Nos. 12-1232, 12-1233, 12-1250, 12-1276, 12-1279, 12-1280, 12-1285, 12-1292,
12-1293, 12-1296, 12-1299, 12-1300, 12-1304, 12-1448, and 12-1478 (Consolidated)
In the United States Court of Appeals
for the District of Columbia Circuit ──────────────────────────
SOUTH CAROLINA PUBLIC SERVICE AUTHORITY, et al., Petitioners,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
────────────────────────── On Petition for Review from the Federal Energy Regulatory Commission
FERC-RM10-23-000 (July 21, 2011), FERC-RM10-23-001 (May 17, 2012), & FERC-RM10-23-002 (Oct. 18, 2012)
──────────────────────────
JOINT INITIAL BRIEF OF PETITIONERS/INTERVENORS CONCERNING STATEMENT OF THE CASE,
STATEMENT OF FACTS, AND STANDARDS OF REVIEW
Attorneys for Petitioners/Intervenors:
Harvey L. Reiter Email: hreiter@stinson.com Jonathan D. Schneider Email: jschneider@stinson.com Jonathan Peter Trotta Email: jtrotta@stinson.com STINSON MORRISON HECKER LLP 1775 Pennsylvania Avenue, NW, Ste 800 Washington, DC 20006 Telephone: (202) 785-9100 Counsel for Petitioners/Intervenors South Carolina Public Service Authority, the Large Public Power Council, and Sacramento Municipal Utility District
Andrew W. Tunnell Email: atunnell@balch.com Ed R. Haden Email: ehaden@balch.com Scott B. Grover Email: sgrover@balch.com BALCH & BINGHAM LLP 1710 Sixth Avenue North Birmingham, Alabama 35203 Telephone: (205) 251-8100 Counsel for Petitioner/Intervenor Southern Company Services, Inc. Initial Brief: May 28, 2013
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George Scott Morris Email: scott.morris@psc.alabama.gov Luther Daniel Bentley, IV Email: luke.bentley@psc.alabama.gov ALABAMA PUBLIC SERVICE COMMISSION Suite 836 100 North Union Street Montgomery, AL 36104 Telephone: (334) 242-5200 Counsel for Petitioner/Intervenor Alabama Public Service Commission Sue Deliane Sheridan Email: suedsheridan@yahoo.com SHERIDAN ENERGY & ENVIRONMENTAL CONSULTING, LLC 1050 Thomas Jefferson Street, NW Suite 700 Washington, DC 20007 Telephone: (202) 298-3718 Counsel for Petitioner/Intervenor Coalition for Fair Transmission Policy
Randolph Lee Elliott Email: relliott@mbolaw.com MILLER, BALIS & O’NEIL, PC 1015 15th Street, NW 12th Floor Washington, DC 20005-2605 Telephone: (202) 296-2960 Counsel for Petitioners/Intervenors American Public Power Association and National Rural Electric Cooperative Association Stephen Matthew Spina Email: sspina@morganlewis.com John D. McGrane Email: jmcgrane@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004-2541 Telephone: (202) 739-3000 Edward Comer, Vice President, General Counsel and Corporate Secretary Email: ecomer@eei.org EDISON ELECTRIC INSTITUTE 701 Pennsylvania Avenue, NW Washington, DC 20004 Telephone: (202) 508-5000 Counsel for Petitioner/Intervenor Edison Electric Institute
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Wendy N. Reed Email: reed@wrightlaw.com Matthew J. Binette Email: binette@wrightlaw.com David S. Berman Email: berman@wrightlaw.com WRIGHT & TALISMAN, P.C. 1200 G Street, NW Suite 600 Washington, DC 20005-3802 Telephone: (202) 393-1200 Counsel for Petitioner/Intervenor Midwest ISO Transmission Owners Howard Haswell Shafferman Email: hhs@ballardspahr.com Jack Nadim Semrani Email: semranij@ballardspahr.com BALLARD SPAHR LLP 1909 K Street, NW 12th Floor Washington, DC 20006-1157 Telephone: (202) 661-2200 Counsel for Petitioner New York Independent System Operator, Inc. Elias G. Farrah Email: EFarrah@winston.com WINSTON & STRAWN LLP 1700 K Street, NW Washington, DC 20006-3817 Telephone: (202) 282-5503 Counsel for Intervenor New York Transmission Owners
Kenneth G. Jaffe Email: kenneth.jaffe@alston.com Michael E. Ward Email: michael.ward@alston.com ALSTON & BIRD LLP 950 F Street, NW Washington, DC 20004-1404 Telephone: (202) 756-3300 Randall Bruce Palmer, Esquire, Senior Counsel Email: rpalmer@firstenergycorp.com ALLEGHENY ENERGY, INC. 800 Cabin Hill Drive Greensburg, PA 15601-0000 Telephone: (724) 838-6894 Counsel for Petitioners/Intervenors American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, and West Penn Power Company
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Kenneth B. Driver Email: kbdriver@jonesday.com JONES DAY 51 Louisiana Ave. NW Washington, DC 20001 Telephone: (202) 879-7629 Counsel for Petitioner/Intervenor Oklahoma Gas and Electric Company Clare E. Kindall Department Head – Energy Email: Clare.Kindall@ct.gov OFFICE OF THE ATTORNEY GENERAL Ten Franklin Square New Britain, CT 06051 Telephone: (860) 827-2683 Counsel for Intervenor Connecticut Public Utilities Regulatory Authority
John L. Shepherd, Jr. Email: John.Shepherd@skadden.com William Rainey Barksdale Email: William.Barksdale@skadden.com Karis Anne Gong Email: Karis.Gong@skadden.com SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 1440 New York Avenue, NW Washington, DC 20005 Telephone: (202) 371-7000 Tamara L. Linde Email: Tamara.Linde@PSEG.com Jodi L. Moskowitz Email: Jodi.Moskowitz@PSEG.com PSEG SERVICES CORPORATION 80 Park Plaza, T5G Newark, NJ 07102-4194 Telephone: (973) 430-6409 Counsel for Petitioners/Intervenors PSEG Energy Resources & Trade LLC, PSEG Power LLC, Public Service Electric and Gas Company, Public Service Enterprise Group Inc.
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Cynthia B. Miller Associate General Counsel Email: cmiller@psc.state.fl.us FLORIDA PUBLIC SERVICE COMMISSION 2540 Shumard Oak Boulevard Tallahassee, FL 32399-0862 Telephone: (850) 413-6082 Counsel for Intervenor Florida Public Service Commission Daniel M. Malabonga Email: dmmalabonga@venable.com VENABLE LLP 575 7th Street, N.W. Washington, D.C. 20004 Telephone: (202) 344-4508 Stephen G. Kozey Vice-President, Secretary, and General Counsel Email: stevekozey@misoenergy.org Mathew R. Dorsett Attorney Email: mdorsett@misonergy.org MIDCONTINENT INDEPENDENT SYSTEM
OPERATOR, INC. P.O. Box 4202 Carmel, IN 46082-46032 Telephone: (317) 249-5431 Counsel for Intervenor Midcontinent Independent System Operator, Inc.
Gary E. Guy Email: gary.e.guy@bge.com BALTIMORE GAS AND ELECTRIC
COMPANY 2 Center Plaza, 13th Floor 110 West Fayette Street Baltimore, MD 21201-0000 Telephone: (410) 470-1337 Jeanne Jackson Dworetzky, Assistant General Counsel Email: jeanne.dworetzky@exeloncorp.com EXELON CORPORATION 101 Constitution Avenue, NW Suite 400 East Washington, DC 20001 Telephone: (202) 347-7500
Counsel for Intervenor Exelon Corporation Barry S. Spector Email: spector@wrightlaw.com Matthew J. Binette Email: binette@wrightlaw.com WRIGHT & TALISMAN, P.C. 1200 G Street, NW Suite 600 Washington, DC 20005-3802 Telephone: (202) 393-1200 Counsel for Intervenor Southwest Power Pool, Inc.
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N. Beth Emery Email: Beth.Emery@HuschBlackwell.com HUSCH BLACKWELL LLP 755 E. Mulberry Street, Suite 200 San Antonio, TX 78212 Telephone: (210) 244-8802 Counsel for Intervenors Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC James Bradford Ramsay General Counsel Email: jramsay@naruc.org Holly Rachel Smith Assistant General Counsel Email: hsmith@naruc.org NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS* *(intervention pending) 1101 Vermont Ave., NW Suite 200 Washington, DC 20005 Telephone: (202) 898-1350 Counsel for Intervenor National Association of Regulatory Utility Commissioners
Daniel E. Frank Email: daniel.frank@sutherland.com Jennifer J.K. Herbert Email: jj.herbert@sutherland.com SUTHERLAND ASBILL & BRENNAN LLP 700 Sixth Street, N.W., Suite 700 Washington, DC 20001-3980 Telephone: (202) 383-0100 Counsel for Western Farmers Electric Cooperative
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CERTIFICATE OF PARTIES, RULINGS UNDER REVIEW, AND RELATED CASES
The undersigned Petitioners and Intervenors respectfully file this Certificate
as to Parties, Rulings, and Related Cases. Fed. R. App. P. 28(a)(1); D.C. Cir. R.
28(a)(1).
I. PARTIES
This case is before the Court on petitions for review from final orders in a
Federal Energy Regulatory Commission (“FERC”) rulemaking proceeding to
which there were no formal parties. The following are parties to the proceeding in
this Court:
Petitioners: (Many of the Petitioners Intervened in other consolidated cases)
Alabama Public Service Commission (Case No. 12-1299)
American Public Power Association (Case No. 12-1296)
Coalition for Fair Transmission Policy (Case No. 12-1233)
Edison Electric Institute (Case No. 12-1279) First Energy Companies (Case No. 12-1285)
(American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, West Penn Power Company)
International Transmission Company, d/b/a ITCTransmission, Michigan Electric
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ii
Transmission Company LLC, ITC Midwest LLC, ITC Great Plains LLC (Case No. 12-1304)
Large Public Power Council (Case No. 12-1292) Midwest ISO Transmission Owners (Case No. 12-
1448) National Rural Electric Cooperative Association
(Case No. 12-1280) New York Independent System Operator, Inc. (Case
No. 12-1293) Oklahoma Gas and Electric Company (Case No. 12-
1478) PSEG Energy Resources & Trade LLC, PSEG Power
LLC, Public Service Electric and Gas Company, Public Service Enterprise Group Inc. (Case No. 12-1250)
Sacramento Municipal Utility District (Case No. 12-1276)
South Carolina Public Service Authority (Case No. 12-1232)
Southern Company Services, Inc. (Case No. 12-1300)
Respondent: Federal Energy Regulatory Commission
Intervenors: American Wind Energy Association Avista Corporation California Independent System Operator Corporation Central Hudson Gas & Electric Corporation City of Santa Clara, CA d/b/a Silicon Valley Power Connecticut Public Utilities Regulatory Authority Conservation Law Foundation Consolidated Edison Company of New York, Inc. Dayton Power and Light Company E.ON Climate & Renewables North America, LLC Environmental Defense Fund Exelon Corporation Florida Public Service Commission Long Island Lighting Company d/b/a/ LIPA Long Island Power Authority Lower Mount Bethel Energy, LLC LS Power Transmission, LLC
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LSP Transmission Holdings, LLC Mid-Kansas Electric Company, LLC Midcontinent Independent System Operator, Inc.
(formerly, Midwest Independent Transmission System Operator, Inc.)
Modesto Irrigation District M-S-R Public Power Agency Natural Resources Defense Council New Jersey Board of Public Utilities New York Power Authority New York State Electric & Gas Corporation Niagara Mohawk Power Corporation Old Dominion Electric Cooperative Orange and Rockland Utilities, Inc. PPL Electric Utilities Corporation PPL EnergyPlus, LLC PPL Brunner Island, LLC PPL Holtwood, LLC PPL Martins Creek, LLC PPL Montour, LLC PPL Susquehanna, LLC PPL New Jersey Solar, LLC PPL New Jersey Biogas, LLC PPL Renewable Energy, LLC Public Utilities Commission of the State of
California Puget Sound Energy, Inc. Rochester Gas and Electric Corporation Southwest Power Pool, Inc. Sunflower Electric Power Corporation Transmission Access Policy Study Group Transmission Agency of Northern California Transmission Dependent Utility Systems Union of Concerned Scientists Western Farmers Electric Cooperative National Association of Regulatory Utility
Commissioners (intervention pending)
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II. RULINGS UNDER REVIEW
Under review in this proceeding are the following final orders of the Federal
Energy Regulatory Commission with the Commission issuance date and the
Federal Register publication dates shown for each:
1) Transmission Planning and Cost Allocation by Transmission
Owning and Operating Public Utilities, Order No. 1000, Final Rule, Docket No. RM10-23-000, 136 FERC ¶ 61,051 (July 21, 2011), 76 Fed. Reg. 49,842 (Aug. 11, 2011);
2) Transmission Planning and Cost Allocation by Transmission
Owning and Operating Public Utilities, Order No. 1000-A, Order on Rehearing and Clarification, Docket No. RM10-23-001, 139 FERC ¶ 61,132 (May 17, 2012), 77 Fed. Reg. 32,184 (May 31, 2012); and
3) Transmission Planning and Cost Allocation by Transmission
Owning and Operating Public Utilities, Order No. 1000-B, Order on Rehearing and Clarification, Docket No. RM10-23-002, 141 FERC ¶ 61,044 (Oct. 18, 2012), 77 Fed. Reg. 64,890 (Oct. 24, 2012).
III. RELATED CASES
The orders under review have not previously been before this Court or any
other court. One of the issues in this consolidated petition for review is whether
FERC exceeded its statutory authority, and usurped state jurisdiction, by requiring
transmission providers to remove from tariffs and contracts any right of first
refusal that utilities have to construct and own new transmission facilities. That
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question is also before this Court in Public Service Electric & Gas Co. v. FERC,
No. 12-1382 (D.C. Cir. Filed Sept. 17, 2012), but it is presented in the narrower
context of a single Regional Transmission Operator, rather than a national rule.
Counsel is not aware of any other related cases pending before this or any other
court.
/s/ Andrew W. Tunnell Andrew W. Tunnell Counsel for Petitioner/Intervenor Southern Company Services, Inc.
And on behalf of Petitioners and Intervenors South Carolina Public Service Authority, the Large Public Power Council, and Sacramento Municipal Utility District; Alabama Public Service Commission; American Public Power Association; Coalition for Fair Transmission Policy; Edison Electric Institute; Exelon Corporation; American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, and West Penn Power Company; Midwest ISO Transmission Owners; National Rural Electric Cooperative Association; New York Independent System Operator, Inc.; New York Transmission Owners,
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Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Long Island Power Authority, New York Power Authority, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation; Oklahoma Gas and Electric Company; PSEG Energy Resources & Trade LLC, PSEG Power LLC, Public Service Electric and Gas Company, Public Service Enterprise Group Inc.; Connecticut Public Utilities Regulatory Authority; Florida Public Service Commission; Southwest Power Pool, Inc.; Midcontinent Independent System Operator, Inc.; Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC; Western Farmers Electric Cooperative; National Association of Regulatory Utility Commissioners (intervention pending)
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CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 26.1 of both the Fed. R. App. P. and the D. C. Cir. R., the
undersigned counsel on behalf of Petitioners and Intervenors identified in the
signature block below discloses the following:
Petitioners
Alabama Public Service Commission (Case No. 12-1299) is not required
to provide a Corporate Disclosure Statement because it is a governmental entity
organized under the laws of the State of Alabama.
American Public Power Association (“APPA”) (Case No. 12-1296) has
no parent corporation or publicly traded stock. It is the national service
organization representing the interests of not-for-profit, publicly owned electric
utilities throughout the United States. More than 2,000 public power utilities,
doing business in every state except Hawaii, serve more than 47 million
Americans. APPA was created in 1940 as a nonprofit, non-partisan organization.
Its purpose is to advance the public policy interests of its members and their
consumers, and provide member services to ensure adequate, reliable electricity at
a reasonable price with the proper protection of the environment. It is a trade
association within the meaning of Circuit Rule 26.1(b).
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Coalition for Fair Transmission Policy (“CFTP”) (Case No. 12-1233) is
an unincorporated professional association or group of geographically and
structurally diverse investor-owned electric utilities formed for the purpose of
supporting legislative and regulatory policies that will lead to customer-focused
development of the nation’s electric transmission systems and clean generation
resources.
Edison Electric Institute (“EEI”) (Case No. 12-1279) is the trade
association of U.S. shareholder-owned electric companies and represents
approximately 70 percent of the U.S. electric power industry. EEI’s members
operate in all regions of the country and rely on transmission resources directly
affected by the FERC orders under review. EEI is a non-stock corporation with no
parent companies, and no publicly-held company has an ownership interest in EEI.
The “FirstEnergy Companies” (American Transmission Systems,
Incorporated, The Cleveland Electric Illuminating Company, FirstEnergy
Solutions Corp., Jersey Central Power & Light Company, Metropolitan
Edison Company, Monongahela Power Company, Ohio Edison Company,
Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac
Edison Company, The Toledo Edison Company, Trans-Allegheny Interstate
Line Company, and West Penn Power Company) (Case No. 12-1285) are
subsidiaries of FirstEnergy Corp., a holding company engaged through its
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subsidiaries, in the generation, transmission and distribution of power throughout
the eastern portion of the United States. There is no publicly held company that
owns more than 10% of FirstEnergy Corp. Each of the FirstEnergy Companies
owns or operates electric generation, transmission, or distribution facilities, or a
combination thereof. They are engaged in the provision of electric services in the
states of New Jersey, Ohio, Pennsylvania, and West Virginia.
Large Public Power Council (“LPPC”) (Case No. 12-1292) is a not-for-
profit trade association representing 25 of the nation’s largest municipal and state-
owned utilities. LPPC’s members own approximately 90% of the transmission
investment owned by nonfederal public power utilities. LPPC does not have any
parent entity, and does not have publicly-traded stock.
The “Midwest ISO Transmission Owners,” including Ameren Services
Company, as agent for Union Electric Company d/b/a Ameren Missouri,
Ameren Illinois Company d/b/a Ameren Illinois, and Ameren Transmission
Company of Illinois; City Water, Light & Power (Springfield, IL); Dairyland
Power Cooperative; Great River Energy; Hoosier Energy Rural Electric
Cooperative, Inc.; Indianapolis Power & Light Company; MidAmerican
Energy Company; Minnesota Power (and its subsidiary Superior Water Light
& Power Company); Montana-Dakota Utilities Co.; Northern Indiana Public
Service Company; Northern States Power Company, a Minnesota
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corporation, and Northern States Power Company, a Wisconsin corporation,
subsidiaries of Xcel Energy Inc.; Northwestern Wisconsin Electric Company;
Otter Tail Power Company; Southern Illinois Power Cooperative; Southern
Indiana Gas & Electric Company (d/b/a Vectren Energy Delivery of Indiana);
Southern Minnesota Municipal Power Agency; and Wolverine Power Supply
Cooperative, Inc. (Case No. 12-1448) state they are a group of investor-owned
transmission owners, cooperatives, and municipals that own transmission facilities
over which the Midcontinent Independent System Operator, Inc.
(formerly, Midwest Independent Transmission System Operator, Inc.) provides
transmission service. The Midwest ISO Transmission Owners were active
participants in the Commission proceeding below and sought rehearing of Order
Nos. 1000 and 1000-A. The Midwest ISO Transmission Owners are subject to,
and will be affected by, the requirements of Order Nos. 1000, 1000-A, and 1000-B.
Ameren Services Company (“Ameren Services”) is a corporation
organized and existing under the laws of the state of Missouri with its
principal place of business in St. Louis, Missouri. Ameren Services is
a wholly-owned subsidiary of Ameren Corporation (“Ameren”) that
provides administrative support services to Ameren and its operating
companies, subsidiaries, and affiliates. Union Electric Company,
d/b/a Ameren Missouri, Ameren Illinois Company, d/b/a Ameren
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Illinois, and Ameren Transmission Company of Illinois (collectively,
the “Operating Companies”) are all wholly-owned subsidiaries of
Ameren. Together, the Operating Companies provide public utility
service to approximately 2.3 million electric customers and more than
900,000 natural gas customers across nearly 64,000 square miles in
Illinois and Missouri.
City Water, Light & Power is the operating name of the Office of
Public Utilities, a division of the City of Springfield, Illinois, a home
rule municipal corporation and political subdivision of the state of
Illinois, organized and existing pursuant to the Illinois Constitution.
The City of Springfield is a political subdivision, and no publicly
owned corporation has any ownership share in the City or its electric
system. City Water, Light & Power is a municipal electric utility
engaged in the transmission, generation, and distribution of electricity
to customers in the City of Springfield and surrounding environs.
Dairyland Power Cooperative (“Dairyland”) is a non-stock
cooperative association organized under the laws of the state of
Wisconsin, with its principal office located in La Crosse, Wisconsin.
Dairyland is engaged, among other things, in the businesses of
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generating and transmitting electric power to its 25 member
distribution cooperatives and to other wholesale customers. Dairyland
has no corporate parent. No publicly held corporations have a 10% or
greater ownership interest in Dairyland.
Great River Energy (“GRE”) is a non-stock generation and
transmission (“G&T”) Cooperative Corporation organized under the
laws of the state of Minnesota that supplies the majority of the electric
requirements for twenty-eight (28) member distribution cooperatives
in Minnesota and Wisconsin. As a G&T cooperative, GRE owns or
contracts for 3,487 MW of generating capacity and 4,577 miles of
transmission facilities in Minnesota, North Dakota, and Wisconsin.
GRE does not have a parent corporation and has not issued shares to
the public. No publicly held company has a 10% or greater ownership
interest in GRE.
Hoosier Energy Rural Electric Cooperative, Inc. (“Hoosier Energy”)
has no parent company or controlling entity. Hoosier Energy has no
stock or partnership share ownership. Hoosier Energy is a generation
and transmission cooperative serving seventeen local rural electric
membership cooperatives in southern and central Indiana and one
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rural electric membership cooperative in southeastern Illinois.
Hoosier Energy owns generation, transmission, and substation
facilities and delivers power at the wholesale level only. Hoosier
Energy’s purpose is to generate and procure power to meet the needs
of its member system demands at the lowest cost possible and deliver
this power in the most reliable manner possible.
Indianapolis Power & Light Company (“IPL”) is a corporation
organized under and existing under the laws of the state of Indiana
with its principal place of business in Indianapolis, Indiana. IPL is a
subsidiary of Ipalco Enterprises, Inc. (“IPALCO”). IPALCO is a
subsidiary of AES Corporation (“AES”). IPL is a public utility
company subject to the jurisdiction of the FERC and the requirements
of the FERC orders at issue in this proceeding. AES is a Delaware
corporation with its principal place of business in Arlington, Virginia.
AES has issued shares of stock and debt securities to the public.
MidAmerican Energy Company (“MidAmerican”) is an Iowa
corporation that provides electric and/or gas utility services to
customers in Iowa, Illinois, Nebraska, and South Dakota. Its principal
place of business is at 666 Grand Avenue, Des Moines, IA, 50306-
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0657. MidAmerican was incorporated in the State of Iowa on July 18,
1994 and is an indirect subsidiary of MidAmerican Energy Holdings
Company (“MEHC”), an Iowa corporation. Intermediate parent
entities of MidAmerican are MHC Inc. and MidAmerican Funding,
LLC. No publicly-held company owns 10% or more of
MidAmerican’s voting equity securities. Neither MHC Inc., which is
100% owned by MidAmerican Funding, LLC, nor MidAmerican
Funding, LLC, which is owned 100% by MEHC, have publicly traded
equity securities. MEHC is a consolidated subsidiary of Berkshire
Hathaway Inc., a publicly traded entity, which owns approximately
89.8% of the voting equity of MEHC. The preceding is a matter of
public record.
ALLETE, Inc., d/b/a Minnesota Power is a Minnesota public utility
company which also owns Superior Water Light & Power Company,
a Wisconsin public utility company. There is no public company that
owns a 10% or greater share in ALLETE, Inc.
Montana-Dakota Utilities Co. is a division of MDU Resources Group,
Inc., a Delaware corporation. Montana-Dakota Utilities Co. is
engaged in the distribution of natural gas and the generation,
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transmission, and distribution of electricity in the states of North
Dakota, South Dakota, Montana, and Wyoming.
Northern Indiana Public Service Company (“NIPSCO”) is an Indiana
corporation engaged in the generation, transmission, and distribution
of energy at wholesale and retail. NIPSCO is a wholly-owned
subsidiary of NiSource Inc. (“NiSource”). NiSource is a public utility
holding company that has outstanding securities in the hands of the
public.
Northern States Power Company, a Minnesota corporation (“NSPM”)
and Northern States Power Company, a Wisconsin corporation
(“NSPW”), are combination electric and natural gas public utilities
and wholly-owned utility operating company subsidiaries of Xcel
Energy Inc.1 NSPM operates in the states of Minnesota, North
Dakota, and South Dakota, and NSPW operates in the states of
Wisconsin and Michigan. NSPM’s public utility operations are
subject to regulation by, inter alia, the Minnesota Public Utilities
Commission, the North Dakota Public Service Commission, and the
1 The other public utility operating company subsidiaries of Xcel Energy
Inc. are Public Service Company of Colorado and Southwestern Public Service Company.
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South Dakota Public Utilities Commission. NSPW’s public utility
operations are subject to regulation by, inter alia, the Public Service
Commission of Wisconsin and the Michigan Public Service
Commission. The wholesale electric utility operations of NSPM and
NSPW are subject to regulation by the FERC.2 The securities of Xcel
Energy Inc. are publicly traded. No publicly held company owns 10%
or more of Xcel Energy Inc. stock.
Northwestern Wisconsin Electric Company (“NWE”) is an investor-
owned utility. No corporation, partnership, or business trust owns a
controlling interest in NWE. No publicly held corporation owns of
record, or to NWE’s knowledge owns beneficially, 10% or more of
NWE’s common stock. NWE is a corporation organized under
Wisconsin law, providing electric service in Polk and Burnett
Counties in northwestern Wisconsin, distributing electricity to
approximately 12,000 customers. NWE also serves approximately 85
retail customers in Pine County in northeastern Minnesota. NWE is a
2 In addition, certain operating company subsidiaries of Xcel Energy Inc.,
including NSPM and NSPW, have issued first mortgage bonds and other debt securities. A complete list of all debt securities of Xcel Energy Inc. subsidiaries is available at the Xcel Energy Inc. web site (www.xcelenergy.com) under Investor Relations.
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public utility as defined in Chapter 196 of the Wisconsin Statutes,
subject to the regulation of the Public Service Commission of
Wisconsin. NWE does not file for equity return approval from FERC.
NWE’s rates are set by the Public Service Commission of Wisconsin.
Otter Tail Power Company is an electric utility providing electrical
service to customers in Minnesota, North Dakota, and South Dakota.
Otter Tail Power Company is a wholly-owned subsidiary of Otter Tail
Corporation, an investor-owned company with diversified interests
that also include manufacturing and construction services. Otter Tail
Corporation does not have any parent companies and no publicly held
corporation has a 10% or greater ownership interest in Otter Tail
Corporation.
Southern Illinois Power Cooperative (“SIPC”) does not have any
parent company and no publicly held company holds a 10% or greater
share in SIPC. SIPC is a Generation and Transmission Cooperative
that has All Load requirement contracts with 6 member distribution
cooperatives. SIPC is responsible for providing kilowatt hours at the
lowest possible cost to its member distribution cooperatives.
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Southern Indiana Gas & Electric Company’s parent is Vectren Corp.,
with Vectren Utility Holdings as the intermediate parent. Vectren
Corp. is the holder of interest in Southern Indiana Gas & Electric
Company. Southern Indiana Gas & Electric Company is a public
electric generating utility organized and existing under the laws of the
state of Indiana, and has its principal office at 211 N.W. Riverside
Dr., Evansville, Indiana 47708. It is engaged in rendering electric
public utility service in the state of Indiana, and owns, operates,
manages, and controls, among other things, plant and equipment
within the state of Indiana used for the production, transmission,
delivery, and furnishing of such services to the public. Southern
Indiana Gas & Electric Company provides retail electric service to
approximately 140,000 customers in six counties in southwestern
Indiana.
Southern Minnesota Municipal Power Agency (“SMMPA”) is a joint
action agency comprised of 18 member municipalities in Minnesota
which own and operate municipal electric systems. SMMPA is a non-
profit political subdivision of the state of Minnesota organized under
Chapter 453 of the Minnesota Statutes. SMMPA functions as the
principal power supplier for its 18 members.
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Wolverine Power Supply Cooperative, Inc. (“Wolverine”) is a non-
profit generation and transmission electric cooperative. Wolverine is
organized under the laws of the state of Michigan and provides
wholesale service to five distribution cooperative members that resell
power at retail to approximately 268,000 customers located in
Michigan and Indiana. Wolverine’s two other members are
alternative retail electric suppliers in Michigan. Wolverine’s
members are both its customers and its owners. Wolverine has no
publicly-issued stock.
National Rural Electric Cooperative Association (“NRECA”) (Case No.
12-1280) is a not-for-profit national service organization (with no parent entity or
publicly-traded stock) and a trade association under Circuit Rule 26.1(b).
New York Independent System Operator, Inc. (“NYISO”) (Case No. 12-
1293) is a not-for-profit corporation organized under laws of the State of New
York. Although it does not own or control any electric power generation facilities,
it possesses operational control over the transmission facilities and it is responsible
for the operation of the bulk power system in the State of New York. The NYISO
is the independent body responsible for providing open access transmission-
service, maintaining reliability, and administering competitive wholesale electricity
markets in New York State. The NYISO is not a publicly held company, and no
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publicly held company has a 10% or greater ownership interest in the NYISO. The
NYISO does not have a parent company nor any affiliates.
Oklahoma Gas and Electric Company (Case No. 12-1478) is a wholly
owned subsidiary of OGE Energy Corp., which is a publicly held corporation. No
publicly held corporation owns 10% or more of the stock of OGE Energy Corp.
Public Service Enterprise Group Incorporated (“PSEG”), Public
Service Electric and Gas Company (“PSE&G”), PSEG Power LLC (“PSEG
Power”), and PSEG Energy Resources & Trade LLC (“PSEG ER&T”) (Case
No. 12-1250). PSE&G and PSEG Power are each wholly owned direct
subsidiaries of PSEG. PSEG ER&T is a wholly owned indirect subsidiary of
PSEG and a direct subsidiary of PSEG Power. The principal and executive offices
of PSEG, PSE&G, PSEG Power and PSEG ER&T are located at 80 Park Plaza,
Newark, New Jersey 07102. PSEG is an exempt public utility holding company
incorporated under the laws of the State of New Jersey. PSEG is engaged in,
among other things, the generation, transmission, and sale of electric energy
through its subsidiaries. PSE&G is a public utility company organized under the
laws of the State of New Jersey. PSE&G is presently engaged in, among other
things, the transmission and distribution of electricity and the distribution of
natural gas in New Jersey. PSE&G owns transmission facilities in PJM
Interconnection, L.L.C. (“PJM”). PSEG Power, a Delaware limited liability
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company, is a wholesale energy supply company that integrates its generation asset
operations with its wholesale energy, fuel supply, energy trading and marketing,
and risk management functions through three principal subsidiaries: (i) PSEG
Nuclear LLC (“PSEG Nuclear”), which owns and operates nuclear generating
stations; (ii) PSEG Fossil LLC (“PSEG Fossil”), which develops, owns, and
operates domestic fossil-fuel fired and other non-nuclear generating stations; and,
(iii) PSEG ER&T, which is described below. PSEG ER&T, a Delaware limited
liability company, sells power and energy and certain ancillary services at market-
based rates. PSEG ER&T markets the capacity and production of PSEG Nuclear’s
and PSEG Fossil’s generating stations, manages the commodity price risks and
market risks related to generation, and provides gas supply services. PSEG ER&T
is engaged in extensive asset based energy trading operations throughout the
Northeast. PSEG has publicly-held common stock outstanding. PSE&G has
publicly-held debt securities outstanding. PSE&G Transition Funding LLC and
PSE&G Transition Funding II LLC, each a wholly-owned subsidiary of PSE&G,
have publicly-held debt securities outstanding. PSEG Power has publicly-held
debt securities outstanding.
Sacramento Municipal Utility District (“SMUD”) (Case No. 12-1276) is
not required to provide a Corporate Disclosure Statement because it is a
governmental entity organized under the laws of the State of California.
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South Carolina Public Service Authority (Case No. 12-1232) is not
required to provide a Corporate Disclosure Statement because it is a governmental
entity organized under the laws of the State of South Carolina.
Southern Company Services, Inc. (“SCS”) (Case No. 12-1300) is the
services company for The Southern Company, a registered public utility holding
company, organized under the laws of the State of Delaware and having its
principal place of business in Atlanta, Georgia. The Southern Company owns all
of the outstanding shares of common stock of SCS and of five (5) electricity utility
subsidiaries: Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, and Southern Power Company
(collectively the “Operating Companies”). The four Retail Operating Companies
(Alabama Power, Georgia Power, Gulf Power and Mississippi Power) are engaged
in the manufacture, generation, transmission, and sale of electricity and serve both
retail and wholesale customers within specified franchised electric service
territories in portions of Alabama, Georgia, Florida and Mississippi, respectively.
Southern Power Company is engaged in the manufacture, generation and sale of
electricity and serves only wholesale customers. SCS acts as agent for the
Operating Companies with respect to the execution and administration of certain
contracts and in proceedings at the Federal Energy Regulatory Commission. As to
the four Retail Operating Companies, SCS also provides services in connection
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with the coordination and oversight of system-wide, integrated resource and
transmission facility planning processes.
Intervenors
Connecticut Public Utilities Regulatory Authority (“CT PURA”) is a
governmental entity.
Exelon Corporation is a holding company, headquartered at 10 South
Dearborn Street, Chicago, Illinois, with operations and business activities in 47
states, the District of Columbia and Canada. Exelon owns Commonwealth Edison
Company (ComEd), Baltimore Gas and Electric Company (BGE) and PECO
Energy Company (PECO). Together ComEd, BGE and PECO own electric
transmission and electric distribution systems that deliver electricity to
approximately 6.6 million customers in central Maryland (BGE), Northern Illinois
(ComEd) and southeastern Pennsylvania (PECO). PECO distributes natural gas to
nearly 500,000 consumers in the suburban Philadelphia area. BGE distributes
natural gas to over 600,000 customers in central Maryland and also operates a
liquefied natural gas facility for the liquefaction and storage of natural gas as well
as associated propane facilities. ComEd, BGE and PECO are members of PJM
Interconnection, L.L.C. (PJM). Exelon Generation is the largest competitive
power generator in the U.S., with approximately 35,000 megawatts of owned
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capacity comprising one of the nation’s cleanest and lowest-cost power generation
fleets, located in a number of organized markets. The company’s Constellation
business unit is one of the nation’s leading marketers of electricity and natural gas
and related products in wholesale and retail markets. These businesses serve
approximately 100,000 business and public sector customers and approximately
one million residential customers in various markets throughout the United States.
Florida Public Service Commission is a governmental entity organized
under the laws of the State of Florida.
Midcontinent Independent System Operator, Inc. (“MISO”) (formerly,
Midwest Independent Transmission System Operator, Inc.) is a Commission-
approved Regional Transmission Organization and is responsible for providing
transmission service and administering energy, ancillary service, and operating
reserve markets in the Midwest pursuant to the rates, terms, and conditions of its
tariff. MISO is a Delaware non-stock, not-for-profit corporation that has no equity
or stock. Thus, it is not subject to the corporate disclosure statement requirement
of Rule 26.1 of this Court or Rule 26.1 of the Federal Rules of Appellate
Procedure.
Mid-Kansas Electric Company, LLC (“Mid-Kansas”). Mid-Kansas is a
limited liability corporation organized under the laws of the State of Kansas and
operated on a non-profit basis. Its principal place of business is in Hays, Kansas.
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Mid-Kansas is owned by five rural electric distribution cooperatives, all non-profit
corporations organized under the laws of the State of Kansas, and one corporation
that is a wholly-owned subsidiary of a Kansas distribution cooperative. Mid-
Kansas does not issue stock and no publicly held corporation owns any part of the
entity.
The “New York Transmission Owners,” including Central Hudson Gas
& Electric Corporation, Consolidated Edison Company of New York, Inc.,
Long Island Power Authority, New York Power Authority, New York State
Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a
National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and
Electric Corporation, state that they are a group of eight electric systems in the
State of New York that own the transmission facilities operated by the NYISO.
The New York Transmission Owners were active participants in the Commission
proceeding below and sought rehearing of Order No. 1000. The New York
Transmission Owners are subject to, and will be affected by, the requirements of
Order Nos. 1000, 1000-A and 1000-B.
• Central Hudson Gas & Electric Corporation (“CHGE”) is a
corporation created and organized under the laws of the State of New York, with
its principal offices in Poughkeepsie, New York. CHGE is an electric and natural
gas utility engaged in, among other things, the businesses of (1) distributing natural
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gas for residential, commercial and industrial use, and (2) transmitting and
distributing electric power to wholesale and retail customers, and transmitting
electric power on behalf of third parties. CHGE’s transmission of electric power in
interstate commerce is regulated by FERC. CHGE is a wholly owned subsidiary
of CH Energy Group, Inc. (“CH Energy”). In addition to CHGE, CH Energy’s
other wholly owned subsidiary is Central Hudson Enterprises Corporation
(“CHEC”). CHEC’s subsidiaries include Griffith Energy Services, Inc., CH-
Auburn Energy, LLC, CHGreentree, LLC, CH Shirley Wind, LLC, and CH-
Lyonsdale, LLC. CHEC also is a majority owner of Lyonsdale Biomass, LLC.
Other than CH Energy and CHGE, none of its affiliate or subsidiary companies has
issued shares of debt or equity securities to the public.
• Consolidated Edison Company of New York, Inc. (“Con Edison”) is a
regulated public utility, incorporated in the State of New York, engaged in the
generation, transmission, distribution and wholesale and retail sale of electric
power and the retail sale of steam and gas throughout the five boroughs of New
York City and in the County of Westchester and the retail sale of gas and steam in
parts of New York City. Con Edison has outstanding shares and debt securities
held by the public and may issue additional securities to the public. Con Edison is
a subsidiary of Consolidated Edison, Inc., which also has outstanding shares and
debt held by the public and may issue additional securities to the public. Con
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Edison is also affiliated with Orange and Rockland Utilities, Inc. (“O&R”), a
subsidiary of Consolidated Edison, Inc., which also has outstanding debt securities
held by the public and may issue additional securities to the public. O&R has two
subsidiaries, Pike County Light and Power and Rockland Electric Company, which
may issue debt securities to the public. No other publicly held companies have a
10 percent or greater ownership interest in Con Edison.
• Long Island Power Authority (“LIPA”) is a corporate municipal
instrumentality and a political subdivision of the State of New York. LIPA is a
wholly-owned operating subsidiary of the Authority, which was formed and exists
under the Business Corporation Law of the State of New York. All of LIPA’s
outstanding stock is owned by the Authority. Neither LIPA nor the Authority has
any parent companies, subsidiaries, or affiliate that has any outstanding shares that
are owned by the public. LIPA is a transmission-owning member of the NYISO.
• New York Power Authority (“NYPA”) is a corporate municipal
instrumentality and a political subdivision of the State of New York (“State”),
organized under the laws of the State, and operating pursuant to Title I of the
Article 5 of the New York Public Authorities Law. NYPA has no companies,
subsidiaries, or affiliates that have any outstanding shares that are owned by the
public. NYPA generates, transmits and sells electric power and principally at
wholesale. NYPA’s customers include various public corporations located within
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the metropolitan area of New York City, as well as businesses, municipal and rural
electric cooperative customers located throughout the State. NYPA is also a
transmission owner member of the NYISO.
• Niagara Mohawk Power Corporation d/b/a National Grid (“Niagara
Mohawk”) is a regulated public utility, incorporated in the State of New York,
engaged in the transmission, distribution and wholesale and retail sale of electric
power and the retail sale of gas in Buffalo, Albany, Syracuse and other portions of
upstate New York. Niagara Mohawk is a Transmission Owner member of the
New York Independent System Operator, Inc. Niagara Mohawk is a wholly
owned subsidiary of Niagara Mohawk Holdings Inc.
• Orange and Rockland Utilities, Inc. (“O&R”) is a regulated public
utility, operating in Orange, Rockland and part of Sullivan counties in New York
State and in parts of Pennsylvania and New Jersey. O&R is engaged in the
transmission, distribution and wholesale and retail sale of electric power and gas.
O&R is a subsidiary of Consolidated Edison, Inc., which also has outstanding debt
securities held by the public and may issue additional securities to the public.
O&R has two subsidiaries, Pike County Light and Power and Rockland Electric
Company, which may issue debt securities to the public. O&R is also affiliated
with Con Edison, a subsidiary of Consolidated Edison, Inc. Con Edison has
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outstanding shares and debt securities held by the public. No other publicly held
companies have a 10 percent or greater ownership interest in O&R.
• New York State Electric & Gas Corporation, and Rochester Gas and
Electric Corporation are wholly owned subsidiaries of Iberdrola USA, Inc., which
in turn is wholly owned by Iberdrola S.A., an international energy company listed
on the Madrid Stock Exchange. Mohawk Holdings Inc. is wholly owned by
National Grid USA. National Grid USA is wholly owned by National Grid
Holdings Inc., which is wholly owned by National Grid (US) Partner 1 Ltd.
National Grid (US) Partner 1 Ltd. is wholly owned by National Grid (US)
Investments 4 Ltd., which is wholly owned by National Grid (US) Holdings Ltd.,
which is wholly owned by National Grid plc. National Grid plc’s ordinary shares
are listed on the London Stock Exchange. National Grid plc’s stock is also held by
U.S. investors through American Depositary Shares which are listed on the New
York Stock Exchange. Preferred shares of Niagara Mohawk are listed and traded
on the New York Stock Exchange, while Niagara Mohawk’s common stock is not
publicly traded.
Sunflower Electric Power Corporation (“Sunflower”). Sunflower is a
non-profit corporation organized under the laws of the State of Kansas with its
principal place of business in Hays, Kansas. Sunflower is owned by six rural
electric distribution cooperatives, all non-profit corporations organized under the
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laws of the State of Kansas. The Sunflower members and their headquarters are as
follows: Lane-Scott Electric Cooperative, Inc., Dighton, KS; Pioneer Electric
Cooperative, Inc., Ulysses, KS; Prairie Land Electric Cooperative, Inc., Norton,
KS; Victory Electric Cooperative Association, Inc., Dodge City, KS; Western
Cooperative Electric Association, Inc., WaKeeney, KS; and Wheatland Electric
Cooperative, Inc., Scott City, KS. Sunflower does not issue stock and no publicly
held corporation owns any part of the entity.
Southwest Power Pool, Inc. (“SPP”) is a non-profit corporation organized
under the laws of the state of Arkansas with its principal place of business in Little
Rock, Arkansas. As a Federal Energy Regulatory Commission-approved Regional
Transmission Organization (“RTO”), SPP is a transmission provider currently
administering electric transmission service over 48,930 miles of transmission lines
covering portions of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New
Mexico, Oklahoma, and Texas. SPP has no parent corporation, and because SPP is
a non-profit corporation that does not issue stock, no publicly held corporation
owns 10% or more stock in SPP.
Western Farmers Electric Cooperative (“WFEC”) is a generation and
transmission cooperative headquartered in Anadarko, Oklahoma and financed by
the Rural Utilities Service. WFEC owns, operates, and maintains more than 3,400
miles of transmission lines located principally in Oklahoma. WFEC serves 23
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distribution cooperative member-owners and Altus Air Force Base, which, in turn,
serve the electric needs of their retail customers in Oklahoma, New Mexico,
Kansas, Texas, and Arkansas. As a not-for-profit electric cooperative owned by its
members, WFEC does not have any parent companies, and no publicly-held
company has a 10% or greater ownership interest in WFEC.
National Association of Regulatory Utility Commissioners (NARUC) is a
quasi-governmental nonprofit organization founded in 1889 and incorporated in
the District of Columbia. NARUC is a “trade association” as that term is defined
in Rule 26.1(b). NARUC has no parent company. No publicly held company has
any ownership interest in NARUC. NARUC represents those government officials
in the fifty States, the District of Columbia, Puerto Rico, and the Virgin Islands,
charged with the duty of regulating, inter alia, the regulated electric utilities within
their respective borders. (Intervention pending.)
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/s/ Andrew W. Tunnell Andrew W. Tunnell Counsel for Petitioner/Intervenor Southern Company Services, Inc. And on behalf of Petitioners and Intervenors South Carolina Public Service Authority, the Large Public Power Council, and Sacramento Municipal Utility District; Alabama Public Service Commission; American Public Power Association; Coalition for Fair Transmission Policy; Edison Electric Institute; Exelon Corporation; American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, and West Penn Power Company; Midwest ISO Transmission Owners; National Rural Electric Cooperative Association; New York Independent System Operator, Inc.; New York Transmission Owners, Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Long Island Power Authority, New York Power Authority, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation; Oklahoma Gas and Electric Company; PSEG Energy Resources & Trade LLC, PSEG Power LLC,
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Public Service Electric and Gas Company, Public Service Enterprise Group Inc.; Connecticut Public Utilities Regulatory Authority; Florida Public Service Commission; Midcontinent Independent System Operator, Inc.; Southwest Power Pool, Inc.; Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC; Western Farmers Electric Cooperative; National Association of Regulatory Utility Commissioners (intervention pending)
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TABLE OF CONTENTS
CERTIFICATE OF PARTIES, RULINGS UNDER REVIEW, AND RELATED CASES ........................................................................................... i
I. PARTIES .......................................................................................................... i
II. RULINGS UNDER REVIEW ........................................................................ iv
III. RELATED CASES ......................................................................................... iv
CORPORATE DISCLOSURE STATEMENT ...................................................... vii
TABLE OF AUTHORITIES .............................................................................. xxxvi
GLOSSARY .............................................................................................................. xl
JURISDICTIONAL STATEMENT .......................................................................... 1
STATEMENT OF THE CASE .................................................................................. 2
STATEMENT REGARDING ADDENDUM ........................................................... 4
STATEMENT OF THE FACTS ............................................................................... 4
I. Historical Background ..................................................................................... 4
A. Voluntary Transmission Planning and Limits on FERC’s Authority over Transmission Before Order No. 1000 .......................... 4
B. Transmission Planning Conducted by Public Utilities Before Order No. 1000. ................................................................................... 11
II. The Orders on Review ................................................................................... 12
A. Development of the NOPR ................................................................. 12
B. The Orders ........................................................................................... 15
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1. FERC’s Claimed Jurisdiction to Mandate Transmission Planning Requirements ...................................... 15
2. Basis for the Orders: FERC’s “Theoretical Threat” ................ 17
3. Cost Allocation ......................................................................... 21
4. Elimination of Rights of First Refusal and Imposition of Nonincumbent Requirements ............................................... 23
5. Public Policy Requirements ...................................................... 25
6. Infringement Upon State Jurisdiction ....................................... 27
7. Reciprocity for Non-Public Utility Transmission Providers ................................................................................... 27
STANDARD OF REVIEW ..................................................................................... 29
STANDING ............................................................................................................. 31
CERTIFICATE OF COMPLIANCE ....................................................................... 38
CERTIFICATE OF SERVICE ................................................................................ 40
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TABLE OF AUTHORITIES
CASES
Atlantic City Elec. Co. v. FERC, 295 F.3d 1 (D.C. Cir. 2002) ..............................5, 9
Carpenters & Millwrights v. NLRB, 481 F.3d 804 (D.C. Cir. 2007) ...................... 31
* Central Iowa Power Coop. v. FERC, 606 F.2d 1156 (D.C. Cir. 1979).................. 7
Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984) ..................................... 30
City of Arlington v. FCC, Nos. 11-1545 & 11-1547, 2013 U.S. LEXIS 3838 (U.S. May 20, 2013) ............................................................................. 30
FCC v. Fox Television Stations, 556 U.S. 502 (2009) ............................................ 29
Federal Power Comm’n v. Sierra Pac. Power Co., 350 U.S. 348 (1956) .............. 24
General Dynamics Land Sys. v. Cline, 540 U.S. 581 (2004) .................................. 30
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) .............................................. 32
Midwest ISO Transmission Owners v. FERC, 373 F.3d 1361 (D.C. Cir. 2004) ............................................................................................... 9
Military Toxics Project v EPA, 146 F.3d 948 (D.C. Cir. 1998) .............................. 32
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) ............................................................................................................. 29
Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) ...................................................................................................... 30
* National Fuel Gas Supply Corp. v. FERC, 468 F.3d 831 (D.C. Cir. 2006) ............................................................................................. 20
New York v. FERC, 535 U.S. 1 (2002) ...................................................................... 4
Otter Tail Power Co. v. United States, 410 U.S. 366 (1973) ................................5, 7
Piedmont Envtl. Council v. FERC, 558 F.3d 304 (4th Cir. 2009) ............................. 6
PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194 (D.C. Cir. 2005) .............. 29
PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203 (D.C. Cir. 2011) .... 29, 31
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Transmission Agency of N. Cal. v. FERC, 495 F.3d 663 (D.C. Cir. 2007) ............. 30
Transmission Agency of N. Cal. v. FERC, 628 F.3d 538 (D.C. Cir. 2010) ............. 30
United Distribution Cos. v. FERC, 88 F.3d 1105 (D.C. Cir. 1996) ........................ 31
United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332 (1956) ............................................................................................................. 24
Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) ........................................ 31
STATUTES
5 U.S.C. § 706(2) .............................................................................................. 29, 31
15 U.S.C. § 717f ......................................................................................................... 5
16 U.S.C. § 824(a) ................................................................................................... 15
16 U.S.C. § 824(b) ..................................................................................................... 5
16 U.S.C. § 824a(a) .................................................................................................... 6
16 U.S.C. § 824a-1(b) ................................................................................................ 7
16 U.S.C. § 824e (2010) ..................................................................................... 1, 15
16 U.S.C. § 824j-1 ................................................................................................... 10
16 U.S.C. § 824o ...................................................................................................... 10
16 U.S.C. § 824p (2006) ............................................................................................ 6
16 U.S.C. § 824q(b)(4)............................................................................................. 10
16 U.S.C. § 825l(a) .................................................................................................... 1
16 U.S.C. § 825l(b) ............................................................................................. 1, 31
Conn. Gen. Stat. § 16-50j ........................................................................................... 6
Fla Stat. Ann. § 366.04(5) .......................................................................................... 6
Fla. Stat. Ann. § 186.801 ........................................................................................... 6
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RULES
Rule 25 (c), D.C. Cir. R. .......................................................................................... 40
Rule 26.1(b), D.C. Cir. R. .............................................................. vii, xix, xxiv, xxxi
Rule 26.1, Fed. R. App. P. ............................................................................. vii, xxiv
Rule 28(a)(1), D.C. Cir. R. ......................................................................................... i
Rule 28(a)(1), Fed. R. App. P. ................................................................................... i
Rule 32(a)(2), D.C. Cir. R. ....................................................................................... 38
Rule 32(a)(7), Fed. R. App. P. ................................................................................. 38
OTHER AUTHORITIES
DOE, 2009 National Electric Transmission Congestion Study ............................... 19
NERC 2009 Summer Reliability Assessment ......................................................... 19
New England Power Co., 52 FERC ¶ 61,090 (1990) ....................................... 11, 12
New Reporting Requirement Under the Federal Power Act and Changes to Form No. FERC-714, FERC Stats. & Regs. ¶ 32,493 (1993) ..................... 7
PacifiCorp, 72 FERC ¶ 61,087, 61,488 (1995) ......................................................... 6
Policy Statement Regarding Regional Transmission Groups, FERC Stats. & Regs. ¶ 30,976 (1993) .................................................................................. 8
Preventing Undue Discrimination and Preference in Transmission Serv., Order No. 890, FERC Stats. & Regs. ¶ 31,241, order on reh’g and clarification, Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 (2007) ...................................................................................................... 10, 11
Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities, 60 Fed. Reg. 17662 (1995) ........................................................................................... 8
Regional Transmission Organizations, Order No. 2000, FERC Stats. & Regs. ¶ 31,089 (1999), order on reh’g, Order No. 2000-A, FERC
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Stats. & Regs. ¶ 31,092 (2000), aff’d sub nom. Public Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001) ............................................... 9
S.Rep.No. 621, 74th Cong., 1st Sess. 49 ................................................................... 7
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GLOSSARY
Act Ad Hoc Coalition of Southeastern Utilities Ad Hoc Coalition of Southeastern Utilities Rehearing APA Commission
The Federal Power Act, 16 U.S.C. §§ 824 et seq. Central Electric Power Cooperative, Inc.; Dalton Utilities; Georgia Transmission Corporation; JEA; MEAG Power; Orlando Utilities Commission; Progress Energy Service Company, LLC (on behalf of Progress Energy Carolinas, Inc. and Progress Energy Florida, Inc.); South Carolina Electric & Gas Company; South Carolina Public Service Authority (Santee Cooper); and Southern Company Services, Inc. (on behalf of Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, and Southern Power Company) Petition for Rehearing of the Ad Hoc Coalition of Southeastern Utilities, FERC Docket No. RM10-23-000 (Aug. 22, 2011), JA_____ Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. The Federal Energy Regulatory Commission or its predecessor, the Federal Power Commission
FERC FirstEnergy or FirstEnergy Companies FirstEnergy Rehearing
Federal Energy Regulatory Commission American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, West Penn Power Company Request for Rehearing and Motion for Clarification of FirstEnergy Companies, FERC Docket No. RM10-23-001 (Aug. 22, 2011), JA_____
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FPA ISO ISO-NE Load-Serving Entity LPPC LPPC Comments Midwest ISO Transmission Owners Midwest ISO Transmission Owners NOPR Comments
The Federal Power Act, 16 U.S.C. § 824 et seq. Independent System Operator ISO New England “[A] distribution utility or an electric utility that has a service obligation.” FPA section 217(a)(1), 16 U.S.C. § 824q(a)(1) Large Public Power Council, a Petitioner Comments of the Large Public Power Council, FERC Docket No. RM10-23-000 (Sept. 29, 2010), JA_____ Ameren Services Company, as agent for Union Electric Company d/b/a Ameren Missouri, Ameren Illinois Company d/b/a Ameren Illinois, and Ameren Transmission Company of Illinois; City Water, Light & Power (Springfield, IL); Dairyland Power Cooperative; Great River Energy; Hoosier Energy Rural Electric Cooperative, Inc.; Indianapolis Power & Light Company; MidAmerican Energy Company; Minnesota Power (and its subsidiary Superior Water Light & Power Company); Montana-Dakota Utilities Co.; Northern Indiana Public Service Company; Northern States Power Company, a Minnesota corporation, and Northern States Power Company, a Wisconsin corporation, subsidiaries of Xcel Energy Inc.; Northwestern Wisconsin Electric Company; Otter Tail Power Company; Southern Illinois Power Cooperative; Southern Indiana Gas & Electric Company (d/b/a Vectren Energy Delivery of Indiana); Southern Minnesota Municipal Power Agency; and Wolverine Power Supply Cooperative, Inc., Petitioners Comments of the Midwest ISO Transmission Owners, FERC Docket No. RM10-23-000 (Sept. 29, 2010), JA___
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MISO NERC NYISO New York Transmission Owners NOPR Non-jurisdictional utilities Order No. 1000 Order No. 1000-A Order No. 1000-B
The Midwest Independent Transmission System Operator, Inc. (now, Midcontinent Independent System Operator) North American Electric Reliability Corporation New York Independent System Operator, Inc. Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Long Island Power Authority, New York Power Authority, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation Notice of Proposed Rulemaking, Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, 131 FERC ¶ 61,253 (2010), JA___ Utilities that are not “public utilities” and thus excluded from FERC jurisdiction; see 16 U.S.C. § 824(f). Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, Final Rule, Docket No. RM10-23-000, FERC Stats. & Regs. ¶ 31,323 (2011), JA____ Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000-A, Order on Rehearing and Clarification, Docket No. RM10-23-001, 139 FERC ¶ 61,132 (2012), JA____ Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000-B, Order on Rehearing and Clarification, Docket No. RM10-23-002, 141 FERC ¶ 61,044 (2012), JA____
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Orders PJM
Order No. 1000, Order No. 1000-A, and Order No. 1000-B PJM Interconnection
PSEG or PSEG Companies
Public Service Electric and Gas Company, Public Service Enterprise Group Inc., PSEG Power LLC, and PSEG Energy Resources & Trade LLC, Petitioners
Public utilities ROFR RTG RTO Southern Southern Company Comments Southern Company Rehearing SPP Sunflower Electric Power Corporation & Mid-Kansas Electric Company, LLC Comments
FERC-jurisdictional utilities, i.e., persons that own or operate facilities subject to FERC jurisdiction under Part II of the Federal Power Act; see 16 U.S.C. § 824(e) Right of First Refusal Regional Transmission Group Regional Transmission Operator Southern Company Services, Inc., a Petitioner Comments of Southern Company Services, Inc., FERC Docket No. RM10-23-000 (Sept. 29, 2010), JA_____ Request for Rehearing of Southern Company Services, Inc., FERC Docket No. RM10-23-000 (Aug. 22, 2011), JA_____ Southwest Power Pool, Inc. Comments of Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC, FERC Docket No. RM10-23-000 (Sept. 29, 2010), JA_____
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JURISDICTIONAL STATEMENT
Petitioners seek review of final rulemaking orders issued by the Federal
Energy Regulatory Commission (“FERC” or the “Commission”) under section 206
of the Federal Power Act (“FPA”), 16 U.S.C. § 824e (2010). The orders on review
are Order No. 1000, Order No. 1000-A, and Order No. 1000-B (collectively, the
“Orders”).
All Petitioners timely filed requests for rehearing of Order No. 1000 under
FPA section 313(a), 16 U.S.C. § 825l(a). After FERC denied rehearing in Order
No. 1000-A, Petitioners Alabama Public Service Commission, American Public
Power Association, Coalition for Fair Transmission Policy, Edison Electric
Institute, International Transmission Company, Large Public Power Council
(“LPPC”), National Rural Electric Cooperative Association, New York
Independent System Operator, Inc. (“NYISO”), the PSEG Companies, Sacramento
Municipal Utility District, South Carolina Public Service Authority, and Southern
Company Services, Inc. (“Southern”) timely filed petitions for review under FPA
section 313(b), 16 U.S.C. § 825l(b). Petitioners Midwest ISO Transmission
Owners and Oklahoma Gas and Electric Company timely filed requests for
rehearing of Order No. 1000-A and, after FERC denied rehearing in Order No.
1000-B, timely filed petitions for review. The Orders are final and this Court has
jurisdiction to review them under FPA section 313(b). Id.
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STATEMENT OF THE CASE
Historically, public utilities have coordinated transmission planning
voluntarily, and transmission-development matters like siting, construction, and
related planning activities have been subject to state regulation. Order No. 1000
and its sequels require extensive and unprecedented changes to transmission
planning, development, and cost allocation that will affect all transmission service
providers and their customers. Among other things, the Orders require all public
utility transmission providers to: (i) engage in coordinated regional transmission
planning, (ii) allocate transmission costs to putative beneficiaries, including those
with whom they may have no contractual or service relationship, and (iii) remove
from their federal tariffs and contracts provisions that recognize existing utilities’
rights to construct and own additions to their transmission systems if such
additions are selected in the regional plan for cost allocation.
FERC generically found that these mandates may “promote the more
efficient and cost-effective development of new transmission facilities” because, in
FERC’s view, the historical practice of voluntary transmission planning and cost
allocation posed a “theoretical threat” to just and reasonable rates. Order No. 1000
P 52, JA____.
Signatories to this brief raise a number of challenges to the Orders. Several
object that the transmission-planning mandate exceeds FERC’s statutory authority,
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which they argue is limited to encouraging, not requiring, coordinated planning.
Various petitioners argue that FERC’s Orders are arbitrary and capricious because
they are aimed, not at correcting specific abuses or unreasonable existing rates, but
at addressing what FERC describes as the “theoretical threat” that existing
planning arrangements might not produce a “more efficient and cost-effective”
transmission system. Several petitioners object that mandating consideration in
planning processes of transmission needs driven by myriad federal, state, and local
public-policy requirements violates the FPA by making the needs of load-serving
entities (e.g., public utilities) an optional consideration and is arbitrary and
capricious. Some petitioners object that the cost-allocation mandate exceeds
FERC’s statutory authority by allowing and directing allocation of transmission
costs to entities having no customer or contractual relationship with the
transmission provider.
Several petitioners argue that FERC lacks authority to order public utilities
to remove exclusive construction rights from their tariffs and to adopt mechanisms
allowing third parties to develop the transmission facilities the utilities need to
satisfy their service requirements. These petitioners argue that FERC’s actions
reduce the efficiencies inherent in vertical integration and arbitrarily interfere with
their public-service obligations to maintain reliable service. Some petitioners also
challenge the Orders for infringing upon the authority reserved to the States as the
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States, not FERC, regulate transmission development. Non-jurisdictional utility
customers contest FERC’s authority to expand the reciprocal-service condition on
their receipt of transmission service to include the Orders’ planning and cost-
allocation mandates. An association of jurisdictional utilities objects that FERC’s
refusal to invoke FPA section 211A to impose the Orders’ mandates on non-
jurisdictional utilities was arbitrary. These and several other challenges to the
Orders are discussed in the issue-specific briefs.
STATEMENT REGARDING ADDENDUM
The relevant statutes and regulations are attached as an addendum.
STATEMENT OF THE FACTS
I. Historical Background
A. Voluntary Transmission Planning and Limits on FERC’s Authority over Transmission Before Order No. 1000
Before 1935, the States alone regulated the provision of electric service.3
The electric industry was characterized by “vertically integrated utilities that had
constructed their own power plants, transmission lines, and local delivery systems”
with oversight by state public service commissions. New York v. FERC, 535 U.S.
1, 5 (2002). Congress enacted Part II of the FPA in that year, granting FERC’s
3 The federal government did license hydroelectric facilities.
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predecessor authority to regulate “the transmission of electric energy in interstate
commerce” and “the sale of electric energy at wholesale in interstate commerce.”
16 U.S.C. § 824(b)(1); see, e.g., Atlantic City Elec. Co. v. FERC, 295 F.3d 1, 4
(D.C. Cir. 2002).
Enactment of Part II of the FPA did not modify the utilities’ ability to
expand the electric system, subject to the States’ regulation of the planning and
siting of transmission facilities. Congress specifically rejected a “pervasive
regulatory scheme for controlling the interstate distribution of power in favor of
voluntary commercial relationships.” Otter Tail Power Co. v. United States, 410
U.S. 366, 374 (1973). “[T]hese relationships are governed in the first instance by
business judgment and not regulatory coercion.” Id. While Congress later granted
the Commission preemptive authority to regulate siting and construction of natural
gas pipelines under section 7 of the Natural Gas Act, 15 U.S.C. § 717f(c), it denied
the Commission similar authority over construction and siting of electric
transmission facilities. See Order No. 1000-A P 139, JA____. “The states have
traditionally assumed all jurisdiction to approve or deny permits for the siting and
construction of electric transmission facilities.” Piedmont Envtl. Council v. FERC,
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558 F.3d 304, 310 (4th Cir. 2009); accord, e.g., PacifiCorp, 72 FERC ¶ 61,087,
61,488 & n.3 (1995).4
In accordance with their regulation of transmission construction and siting,
some state commissions have authority over transmission planning. See, e.g., Fla.
Stat. Ann. § 186.801 (providing for the state commission’s regulation of ten-year
siting plans); Fla Stat. Ann. § 366.04(5) (providing the state commission
jurisdiction over “the planning, development, and maintenance of a coordinated
electric power grid” throughout the State); see also Conn. Gen. Stat. § 16-50j
(providing a state siting council jurisdiction over numerous transmission planning
and siting issues).
Consistent with the foregoing, FPA section 202(a) directs FERC to identify
regional districts within which utilities would engage in “the voluntary
interconnection and coordination of facilities for the generation, transmission, and
sale of electric energy” and “to promote and encourage such interconnection and
coordination.” 16 U.S.C. § 824a(a). “Congress was convinced that ‘enlightened
self-interest’ would lead utilities to engage voluntarily in power planning
arrangements, and it was not willing to mandate that they do so.” Central Iowa
4 In 2005, Congress granted FERC limited, “backstop” siting authority that
is not relevant here. See 16 U.S.C. § 824p (2006).
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Power Coop. v. FERC, 606 F.2d 1156, 1168 (D.C. Cir. 1979) (citing S.Rep.No.
621, 74th Cong., 1st Sess. 49; Otter Tail, 410 U.S. at 374).
The Commission began to utilize this authority to promote voluntary
coordination in the 1960s when it encouraged the formation of regional reliability
councils and the North American Electric Reliability Council (now a Corporation)
(“NERC”) tasked with “expand[ing] regional and national coordination among
utilities to further enhance reliability.” New Reporting Requirement Under the
Federal Power Act and Changes to Form No. FERC-714, FERC Stats. & Regs.
¶ 32,493, P 32,688 (1993) (proposed regulations). In 1978, Congress amended the
FPA to require FERC to report on power pooling developments (a form of
coordination),5 but otherwise did not change FERC’s role in promoting voluntary
coordination. 16 U.S.C. § 824a-1(b). Complementing the formation of NERC and
regional reliability councils during the period, a number of large power pooling
agreements were formed or expanded in the 1960s and 1970s. See, e.g., Central
Iowa, 606 F.2d at 1160 (Mid-Continent Area Power Pool).
Presaging the voluntary regional transmission organizations (“RTOs”) it
would later promote, in the early 1990s FERC sought to facilitate voluntary
formation of Regional Transmission Groups (“RTGs”). Transmission-owning
5 Power pooling involves the coordinated planning and operation of
generation and transmission facilities. Central Iowa, 606 F.2d at 1162 n.16.
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RTG members would agree to transmit power for others, open membership
broadly, and engage in “coordinated regional transmission planning and
information sharing.” Policy Statement Regarding Regional Transmission Groups,
FERC Stats. & Regs. ¶ 30,976 at 30,869-70 (1993). An entity agreeing to these
conditions “would have been entitled to have its decisions receive some degree of
deference from the Commission (consistent with the FPA).” Id. This approach,
FERC stated, was in keeping with the “purely voluntary” nature of RTGs and
FERC’s “limited authority in the development and success of RTGs.” Id. at
30,872.
In 1996, FERC issued Order No. 888, requiring public utilities to provide
non-discriminatory open access to their transmission networks, based on a pro
forma open access tariff for the provision of transmission service. The open access
requirement was predicated on transmission remaining a natural monopoly: “[I]t is
often better,” FERC noted, “for a single owner . . . to build a single large
transmission line rather than for many transmission owners to build smaller
parallel lines . . . .” See Promoting Wholesale Competition Through Open Access
Non-discriminatory Transmission Services by Public Utilities, 60 Fed. Reg. 17662,
17675 (1995) (Order No. 888 Notice of Proposed Rulemaking). Order No. 888
also “set[s] forth the framework for voluntarily creating Independent System
Operators (‘ISOs’), independent companies that manage transmission facilities
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owned by utilities.” Atlantic City, 295 F.3d at 5. Several ISOs were formed
including NYISO, PJM Interconnection (“PJM”), ISO New England (“ISO-NE”),
the Midwest Independent Transmission System Operator, Inc. (“MISO”) (now,
Midcontinent Independent System Operator), and the California Independent
System Operator Corporation.
Only a few years after Order No. 888, FERC encouraged the voluntary
formation of RTOs in Order No. 2000.6 See Regional Transmission
Organizations, Order No. 2000, FERC Stats. & Regs. ¶ 31,089, 31,033 (1999),
order on reh’g, Order No. 2000-A, FERC Stats. & Regs. ¶ 31,092 (2000), aff’d sub
nom. Public Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001). In FERC’s
view, RTOs would result in “better regional coordination in areas such as
maintenance of transmission and generation systems and transmission planning
and operation.” Midwest ISO Transmission Owners v. FERC, 373 F.3d 1361, 1364
(D.C. Cir. 2004). “Order No. 2000 still did not require utilities to join RTOs;
participation remained voluntary.” Id. at 1365 (emphasis in original). See Public
Util. Dist. No. 1, 272 F.3d at 609-10 (noting voluntariness); Atlantic City, 295 F.3d
6 ISOs were originally designed to provide primarily for the performance of
transmission planning and some operations by an entity independent of other market participants, while RTOs represented a further evolutionary step that also provided for that independent entity administering certain power markets.
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at 10-12 (same). PJM, ISO-NE, MISO, and the Southwest Power Pool, Inc.
(“SPP”) became RTOs.
In 2005, Congress amended the FPA to add section 217, which contains the
FPA’s only express mention of transmission planning.7 This section requires
FERC to exercise its authority “in a manner that facilitates the planning and
expansion of transmission facilities to meet the reasonable needs of load-serving
entities to satisfy the service obligations of the load-serving entities….” 16 U.S.C.
§ 824q(b)(4).
Order No. 890, issued in early 2007, sought to remedy “flaws” FERC
perceived in the pro forma open access tariffs it had adopted a decade earlier in
Order No. 888, including “the lack of specificity” regarding how customers and
other stakeholders should be treated in the transmission planning process.
Preventing Undue Discrimination and Preference in Transmission Serv., Order
No. 890, FERC Stats. & Regs. ¶ 31,241, P 1755, order on reh’g and clarification,
Order No. 890-A, FERC Stats. & Regs. ¶ 31,261 (2007). Concerned that a lack of
transparency in that process was leading to “inadequate levels of investment in the
grid and increasing transmission congestion,” FERC ordered several changes to the
7 Congress also added to the FPA section 215, governing the development
and enforcement of mandatory reliability standards, and section 211A, allowing FERC to require non-public utility transmission providers to provide transmission services on a comparable and not unduly discriminatory or preferential basis. 16 U.S.C. §§ 824o, 824j-1.
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pro forma tariff. Order No. 890 P 61. Among the changes, FERC required public
utility “transmission planning meetings [to] be open to all affected parties,
including . . . all transmission and interconnection customers, state commissions
and other stakeholders.” Id. P 460.
B. Transmission Planning Conducted by Public Utilities Before Order No. 1000.
The voluntary coordinated planning of transmission facilities is a long-
standing practice that has “made significant strides with respect to . . . regional
transmission planning processes.” Notice of Proposed Rulemaking, Transmission
Planning and Cost Allocation by Transmission Owning and Operating Public
Utilities, 131 FERC ¶ 61,253, P 12 (2010) (“NOPR”), JA___. Both before and in
response to Order No. 890, utilities throughout the United States undertook various
efforts to coordinate their transmission planning.
RTOs and ISOs nationwide have long coordinated extensive transmission
planning (with stakeholder input) with their member transmission owners. The
predecessors of some of these organizations have regional planning histories going
back several decades. See, e.g., New England Power Co., 52 FERC ¶ 61,090,
61,330 n.2 (1990). In the notice of proposed rulemaking leading to the Orders,
FERC praised the “expanded cooperation and collaboration that is now occurring
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in transmission planning both among transmission providers and between
transmission providers and their stakeholders.” NOPR P 32.
Areas of the country without RTOs or ISOs (e.g., large portions of the West
and the Southeast) are served by vertically integrated utilities that have also
engaged in extensive coordination efforts. Transmission planning and expansion
throughout the Western Interconnection is coordinated through numerous
transmission planning groups, including WestConnect and its Colorado
Coordinated Planning Group, ColumbiaGrid, Northern Tier Transmission Group,
and the California Transmission Planning Group. Id. P 21 n.16. Utilities in the
Southeast have also long engaged in coordinated transmission planning though the
SERC Reliability Corporation’s reliability assessment process and through
bilateral reliability agreements.8
II. The Orders on Review
A. Development of the NOPR
In 2009, while Order No. 890 compliance filings were still pending before it,
FERC commenced an inquiry into the adequacy of that order’s planning processes.
Transmission Planning Processes Under Order No. 890, Notice of Request for
Comments, Docket No. AD09-8-000 (Oct. 8, 2009). FERC sought comments
8 Southern’s Reh’g Requ., Exhibit 1, Suppl. Aff. of Bryan K. Hill, PP 10-16, 29, JA______; LPPC Comments 13, JA____.
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regarding potential remedies to perceived remaining shortcomings in transmission
planning and cost allocation post-Order No. 890 to attract needed transmission
investment, including whether FERC should consider requiring increased
coordination among transmission systems and adoption of new cost allocation
methodologies, and whether existing rights of first refusal (“ROFRs”) were
impeding transmission development.
FERC’s NOPR, issued less than a year later, noted a “widely recognized . . .
trend of increased investment in the country’s transmission infrastructure [that] has
emerged in recent years.” NOPR P 33 n.41, JA____. FERC also acknowledged
that “regional transmission planning processes” had become “more open,
transparent and inclusive” and that non-RTO regions had “also made significant
strides with respect to transmission planning by working together to enhance
existing, or create new, regional transmission planning processes.” Id. P 12,
JA____. These efforts, FERC said, were “facilitating the development of more
efficient and effective transmission expansion plans.” Id.
FERC nonetheless concluded that existing planning processes were deficient
and that reform of “transmission planning and cost allocation processes [is needed]
so that the transmission grid can better support wholesale power markets and
thereby ensure that Commission-jurisdictional services are provided at rates, terms
and conditions that are just and reasonable and not unduly discriminatory or
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preferential.” Id. P 1, JA____. Relying on evidence, NOPR PP 33-40, JA____-
____, criticized by a number of parties as thin, anecdotal, and conclusory,9 FERC
found that “siting, permitting and cost allocation of transmission facilities face
significant challenges,” and that without a “requirement for a regional transmission
plan . . . the construction of new transmission facilities could be inhibited.” NOPR
PP 34-35, JA____-____.
Other NOPR provisions would require that transmission plans consider
transmission needs driven by public policy requirements and that owners of
transmission facilities designated in the planning process as having met certain
criteria would be eligible to allocate costs on a regional basis. FERC proposed
requiring public utilities with existing ROFR provisions in their tariffs and
agreements to remove them, id. PP 87-89, JA____-____, while allowing
“nonincumbent” transmission developers (i.e., entities other than the utilities that
own the existing transmission facilities in the region) to build projects in public
utilities’ state franchised service territories if chosen to do so under the FERC-
mandated regional planning process, id. P 96, JA___. FERC also proposed to
mandate interregional coordination of transmission planning and development, and
adoption of regional and interregional cost allocation methods. Id. PP 114-120,
164-178, JA____-____, ____-____.
9 E.g., LPPC Comments 7-11, JA____.
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B. The Orders
Order No. 1000 adopted the NOPR’s proposals in all material respects.
Order Nos. 1000-A and 1000-B, while providing some clarification, denied the
rehearing requests. An overview of Petitioners’ challenges to and FERC’s
justifications of the Orders follows.
1. FERC’s Claimed Jurisdiction to Mandate Transmission Planning Requirements
In comments on the NOPR and on rehearing of Order No. 1000, various
Petitioners observed that FPA section 202(a) authorizes FERC only to “promote
and encourage” the “voluntary interconnection and coordination of facilities for the
. . . transmission . . . of electric energy,” and they challenged FERC’s jurisdiction to
compel coordinated regional transmission. Even assuming such authority, they
added that FPA section 206, 16 U.S.C. § 824e, gives FERC only the power to reset
“unjust” or “unreasonable” rates for the transmission of electricity. Section 206
does not, they continued, authorize FERC to mandate coordinated planning that
may be more “efficient” or “cost-effective” than the status quo.10 Several
Petitioners also asserted that the proposed rule would violate FPA section 201(a),
16 U.S.C. § 824(a), by regulating transmission development matters that remain
the domain of the States.
10 E.g., FirstEnergy Reh’g Requ. 13-15, JA__.
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FERC acknowledged that FPA section 202(a) permitted it to only promote,
not to require, “interconnection and coordination of facilities.” Order No. 1000-A
P 123, JA____. But FERC held that the reference to “interconnection and
coordination” means that “coordination” under the statute takes place only after
“interconnection,” i.e., after transmission facilities were built, so that coordination
referred only to coordination of “operation of generation and transmission
facilities,” not the planning of new transmission facilities. Id. P 125, JA____.
Thus, it concluded, the prohibition against mandating coordination applied only to
operations, not planning. Id. P 129, JA___.
As to objections that FERC itself had previously described “coordination” as
referring to planning as well as operations in its 1970 National Power Survey,
FERC said that the parties had offered no proof its prior reference to
“coordination” was “intended as an interpretation of the term ‘coordination’ for
purposes of Section 202(a).” Order No. 1000-A P 146, JA____. Even if it had
been interpreting coordination under section 202(a), FERC added, that section had
defined coordination as including “planning and operation.” Id. (emphasis in
original). Since Order No. 1000 mandated “joint planning alone,” FERC said,
there was no inconsistency because joint planning, by itself, “is not coordination
under this definition.” Id.
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2. Basis for the Orders: FERC’s “Theoretical Threat”
FERC commenced its inquiry that led to the NOPR assuming that there was
insufficient investment in transmission and that FERC, presumably, needed to take
actions to encourage investment.11 Less than one year later, FERC essentially
recognized that its assumption of insufficient investment was incorrect, finding a
“widely recognized … trend of increased investment in the country’s transmission
infrastructure [which has] has emerged in recent years.” NOPR P 33 n.41,
JA____. FERC ultimately found that “in the relatively short time since the
issuance of Order No. 890, regional “transmission planning processes … have seen
substantial improvements” and “in many regions continue to evolve.” Order No.
1000 P 43, JA____. FERC reiterated its earlier-expressed concern that “inadequate
transmission planning and cost allocation requirements may be impeding the
development of beneficial transmission lines or resulting in inefficient and
overlapping transmission development due to a lack of coordination.” Id.
FERC’s decision to proceed with a generic national rule drew numerous
objections from parties who maintained that FERC’s concerns were only
conjectural and that Order No. 1000’s objectives were already being met through
the voluntary initiatives of transmission providers in many regions of the country.
11 Notice of Request for Comments, Docket No. AD09-8-00, p. 6 (2009). In the ensuing NOPR in Docket No. RM10-23-000, the proceeding now on appeal, FERC refers to the questions raised in that Notice and associated comments as its own. NOPR, PP 22-24, JA___-____.
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The Orders, they noted, were based, not on evidence of specific problems, but on
FERC’s determination that “inadequate transmission planning and cost allocation
requirements may be impeding the development of beneficial transmission lines,”
and that the Orders “could” or “may” identify transmission solutions that “meet the
needs of a transmission planning region more efficiently or cost-effectively.”12
The parties also maintained that their own experiences disproved FERC’s
assumptions. LPPC, for example, presented a detailed overview of planning in
various regions in which its members do business.13 A group of southeastern
utilities similarly submitted evidence that their region is not characterized by a lack
of coordination but that their planning processes are more than effective, to address
future challenges. Their evidence described how their coordinated planning had
resulted in a robust transmission grid. They referenced the Department of
12 Order No. 1000 P 81, JA____; see, e.g., Order No. 1000 P 6, JA____ (stating that the Orders “may resolve the transmission planning region’s needs more efficiently and cost-effectively”) (emphasis added); id. P 47, JA____ (stating that without the Orders, existing practices “could result in Commission-jurisdictional services being provided at rates that are unjust and unreasonable”) (emphasis added); id. P 81, JA____ (stating that without the Orders, “‘public utility transmission providers may not adequately assess the potential benefits of alternative transmission solutions at the regional level that may meet the needs . . . more efficiently or cost-effectively’”) (emphasis added); id. P 559, JA____ (stating that without the Orders, “there is a greater potential that public utility transmission providers and nonincumbent transmission developers may be unable to develop transmission facilities”) (emphases added).
13 LPPC Reh’g Requ. 16 n.36 (citing LPPC Initial NOPR Comments, Attachment, filed September 29, 2010 in FERC Docket No. RM10-23-000), JA____.
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Energy’s 2009 Transmission Congestion Study that concluded that “[b]ecause
southeastern utilities build aggressively in advance of load, there is little economic
or reliability congestion within the region,”14 with the Department of Energy
further attributing this success to the effectiveness of the region’s transmission
planning.15 The Midwest ISO Transmission Owners demonstrated that efficient
and cost-effective regional transmission development is occurring in RTO regions,
including collaborative participation by nonincumbents.16 Sunflower Electric
Power Corporation and Mid-Kansas Electric Company, LLC (collectively,
“Sunflower”) took specific exception to the assertion that ROFRs limit the ability
of nonincumbents to develop projects, noting SPP’s success with new projects and
demonstrating how the ROFR facilitates collaboration between nonincumbents
seeking to enter the region and smaller, principally rural transmission owners.17
This evidence, FERC concluded, did “not mitigate our need to act at this
time.” Order No. 1000 P 44, JA____. Rather, it said, “[t]he increased focus on
14 Ad Hoc Coalition of Southeastern Utilities’ Reh’g Requ. 22, JA___ (citing
DOE, 2009 National Electric Transmission Congestion Study 60-61 (“Congestion Study”)), JA___.
15 Congestion Study 60 (quoting NERC 2009 Summer Reliability Assessment 131), JA___.
16 Midwest ISO Transmission Owners’ NOPR Comments 34-40, JA____-____; Id. Reply Comments 10-14, JA____-____.
17 Sunflower’s Comments 13-19, JA__-__.
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investment in new transmission projects makes it even more critical to implement
these reforms to ensure that the more efficient or cost-effective projects come to
fruition.” Id. P 46, JA____. Citing National Fuel Gas Supply Corp. v. FERC, 468
F.3d 831 (D.C. Cir. 2006), FERC added that it did not need actual evidence that
existing planning processes were producing unreasonable rates, where, as here,
“the problem the Commission seeks to resolve represents a ‘theoretical threat,’”
stating:
We conclude that the narrow focus of current planning requirements and shortcomings of current cost allocation practices create an environment that fails to promote the more efficient and cost-effective development of new transmission facilities, and that addressing these issues is necessary to ensure just and reasonable rates. In other words, the problem that the Commission seeks to resolve represents a “theoretical threat,” in the words of the National Fuel decision . . . .
Order No. 1000 P 52, JA____. According to FERC, the “actual experiences of
problems” cited in the Orders, “provide additional support for our action, but are
not necessary to justify the remedy.” Id. P 53, JA____. “A wide range of
concerns,” FERC explained, “have been raised by commenters, and the
Commission need not, and should not, wait for systemic problems to undermine
transmission planning before it acts.” Order No. 1000 P 50, JA____.
On rehearing, various Petitioners argued that, if a theoretical threat could
suffice to justify FERC’s rule under National Fuel, at the very least FERC faced an
extremely high burden if it sought to rely on theory alone. Reliance on theory
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alone could only conceivably suffice if the rule’s subject matter lends itself to
resolution without reliance on fact-finding. Citing record evidence, certain
Petitioners and Intervenors also argued that FERC’s Orders would likely harm, not
advance, transmission planning processes.18 Petitioners further challenged FERC’s
underlying theory, stating that the Orders would undermine the efficiencies
afforded by vertical integration. FERC rejected these arguments, explaining that
the “theoretical threat” of potential future inefficiency or cost-ineffectiveness on
which it predicated its Orders constituted “legislative facts,” and that the
description of FERC’s hypothesis upon which the Order was based satisfied the
APA’s substantial evidence requirements. Order No. 1000-A PP 61-75, JA____-
____.
3. Cost Allocation
Order No. 1000 requires each public utility transmission provider to have in
place a method, or set of methods, for allocating the costs of new transmission
facilities selected in regional transmission plans for purposes of cost allocation.
Order No. 1000 P 558, JA____. The methodology is required to meet a number of
cost allocation principles, including that costs be allocated to entities within a
planning region roughly commensurate with the benefits they receive and that no
18 Southern’s Reh’g Requ. 30-31, 55, JA___-___, ___ (citing Ex. 1, Suppl. Aff. of Bryan K. Hill PP 15, 17, 18); Sunflower’s Reh’g Requ. 2, 10, JA__, ___.
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entity within a planning region be allocated the costs of new transmission projects
from which they derived no benefit. Id. PP 544, 612, JA__, ___.
FERC declined to define “benefits,” generally refused to establish limiting
parameters on the term, and formalized its determination that transmission
developers may and should allocate costs to “beneficiaries” throughout a region
whether or not they provide service to those entities. Id. P 537 n.427, JA____.19
FERC’s “jurisdiction is broad enough,” it stated in response to objections, “to
allow it to ensure that beneficiaries of service provided by specific transmission
facilities bear the costs of those benefits regardless of their contractual relationship
with the owner of those transmission facilities.” Order No. 1000 P 539, JA____.
FERC explained that the source of its authority is “Section 201(b)(1) of the FPA
[which] gives the Commission jurisdiction over ‘the transmission of electric
energy in interstate commerce.’” Id. P 532, JA____ (citation omitted). FERC
asserted that insisting on the existence of a customer/provider relationship through
a contract or tariff for service as a prerequisite for cost allocation is “ignoring
substance in favor of form.” Id. P 537 n.427, JA____.
19 On rehearing, FERC rejected arguments that FPA section 205 did not
permit it to accept rates that charge entities outside a planning region, and with no contractual or customer relationship with the rate filer, for the cost of transmission upgrades, Order No. 1000-A PP 561-567, JA___-___. Yet FERC adopted a regional cost allocation principle that would not permit allocation to such external entities without their agreement. Order No. 1000 P 657, JA___.
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FERC also rejected other objections to the cost allocation requirement,
including that: (i) the requirement is inconsistent with FERC precedent (Order No.
1000-A PP 582-584, JA___-___); (ii) resolving allocation in advance of a section
205 filing by the transmission facility developer is unlawful under the FPA (id.
P 589, JA__, ___); and (iii) the requirement infringes on state authority (id. P 620,
JA___).
The Orders also required adoption of a common cost allocation methodology
(conforming to similar cost allocation principles) between neighboring regions for
interregional transmission projects selected for cost allocation. Order No. 1000
P 578, JA___.
4. Elimination of Rights of First Refusal and Imposition of Nonincumbent Requirements
The Orders mandate that transmission providers (i) strip from their federal
tariffs and agreements provisions recognizing utilities’ ROFRs to construct new
transmission projects included in regional plans as additions to their existing
systems for the purpose of cost allocation; and (ii) give nonincumbents the right to
construct, own, and recover the costs of such facilities. Order No. 1000 PP 253,
323-28, JA___-___.
FERC contended that this was necessary to increase competition and
eliminate discrimination among transmission developers. See, e.g., id. P 253,
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JA___. Parties raised numerous objections, including that the mandate exceeded
FERC’s jurisdiction under FPA section 206, see, e.g., id. PP 273-75, 280-83,
JA___-___, ___-___; impermissibly intruded on States’ historical jurisdiction over
the siting and construction of transmission facilities, see id. PP 276-79, JA___-___;
violated, in some instances, the Mobile-Sierra doctrine,20 see, e.g. id. P 283,
JA___; discriminated against incumbent transmission providers in favor of
nonincumbent transmission developers, see, e.g., id. P 249, JA___; discriminated
against incumbent transmission owners in RTOs in favor of incumbent
transmission owners outside RTOs, see, e.g., id.; ignored evidence of the benefits
of a ROFR approved by FERC only two years before;21 was inconsistent with FPA
section 215, see id. P 341, JA___; violated FPA section 217(b)(4), see id. PP 91,
460, JA___, ___; was unsupported by and contrary to the evidence, see, e.g., id.
P 239-245, JA___-___; and would negatively affect reliability, impede planning,
and substantially harm consumers, see, e.g., id. PP 245-47, JA___-___.
FERC rejected all those arguments and adopted its proposal to require the
elimination of ROFRs (with certain limited exceptions) without significant
modification. Id. P 313, JA____. FERC concluded that it had the necessary
20 Mobile-Sierra refers to two cases, United Gas Pipe Line Co. v. Mobile
Gas Serv. Corp., 350 U.S. 332 (1956), and Federal Power Comm’n v. Sierra Pac. Power Co., 350 U.S. 348 (1956).
21 Sunflower’s Reh’g Requ. 7, JA____.
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authority under FPA section 206, id. P 284, JA___, and that its ruling was
supported by a “theoretical threat,” id. P 52, JA___. FERC declined to address in
the generic rulemaking proceeding arguments that its mandate violates the Mobile-
Sierra doctrine. Id. P 292, JA____; Order No. 1000-A PP 388-89, JA____-____.
On rehearing, FERC expanded its prohibition against ROFRs in tariffs or
agreements stating that a ROFR would be impermissible if any costs of a
transmission facility are allocated outside of an incumbent transmission provider’s
retail distribution service territory or footprint, including 100 percent allocation to
a single local RTO “pricing zone” consisting of more than one utility’s
transmission system. A federal ROFR for that facility is prohibited, regardless of
whether the facility was designed to serve local needs or was determined to be a
more efficient or cost-effective solution to regional needs. Order No. 1000-A
P 424, JA____. On further rehearing, FERC rejected arguments that this decision
to broaden the scope of facilities for which a ROFR must be eliminated was
unsupported by record evidence. Order No. 1000-B P 52, JA____.
5. Public Policy Requirements
The Orders mandate that public utility transmission provider planning
processes consider transmission needs driven by “Public Policy Requirements” in
municipal, state, and federal laws and regulations. See Order No. 1000 PP 203-23,
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JA___-____; Order No. 1000-A PP 317-39, JA____-____. FERC asserted that
this mandate is needed (i) “to remedy opportunities for undue discrimination” and
(ii) because without the mandate, “the needs of wholesale customers may not be
accurately identified.” Order No. 1000 PP 203-04, JA____-____. At the same
time, FERC “decline[d] to mandate the consideration of transmission needs driven
by any particular Public Policy Requirement,” including FPA section 217. Order
No. 1000 P 215, JA__.
In Order No. 1000 PP 203-224, JA___-___, and Order No. 1000-A PP 168-
176, 203-216, JA___-___, ___-___, FERC rejected arguments that: (i) FERC’s
mandate does not comply with FPA section 217(b)(4)’s directive that FERC
exercise its authority to “facilitate[ ] the planning and expansion of transmission
facilities to meet the reasonable needs of load-serving entities to satisfy [their]
service obligations” because FERC did not require that such transmission needs be
considered in the planning process; (ii) the mandate is impermissibly vague and
provides insufficient notice of what transmission providers must consider and how
they are required to do so; (iii) the mandate is not justified by substantial evidence
and represents a departure from FERC’s prior practices; and (iv) the mandate will
have unintended negative consequences for wholesale markets.
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6. Infringement Upon State Jurisdiction
Many parties, including state commissions and their membership
organization, argued that the Orders’ requirements would infringe upon state
jurisdiction, particularly as the Orders involve transmission planning and
development matters that have historically been left to the business judgment of
the affected utilities, subject to state oversight. Not only was FERC impermissibly
using its jurisdiction under section 206 to indirectly regulate transmission planning,
siting, construction, and resource planning matters reserved to the States, they
argued that FERC was relegating the States to mere stakeholders regarding matters
over which the States, not FERC, have primary jurisdiction.
FERC rejected these arguments, stating that the Orders do not interfere with
state jurisdiction over transmission construction and siting, and that the Orders
were not intended to interfere with state-regulated integrated resource planning.
See Order No. 1000 PP 107, 156, 175, 213, JA____, ____, ____, ____; Order No.
1000-A PP 186, 192-94, 215, 620, JA____, __-__, ____, ____.
7. Reciprocity for Non-Public Utility Transmission Providers
FERC explained that the reciprocity provisions it first adopted in Order No.
888 also apply to the transmission planning requirements FERC adopted in the
Orders. Order No. 1000-A PP 772-73, JA____-____. FERC added, however, that
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if a public utility did demand reciprocity, “those that ‘take advantage of open
access, including improved transmission planning and cost allocation, should be
expected to follow the same requirements as public utility providers.’” Id. P 773,
JA____ (citation omitted).
FERC rejected arguments by municipal utilities and rural electric
cooperatives that applying FERC’s long-standing reciprocity rule to require non-
public utility transmission providers to satisfy the Order No. 1000 transmission
planning and cost allocation mandates was extending the concept of reciprocity
beyond its intended purpose of requiring bilateral transmission service. It further
rejected the argument that, because FPA section 211A only gave FERC the
affirmative authority to require a non-public utility transmission provider to offer
others the same transmission services it provides itself, a fortiori, FERC could not
indirectly impose a reciprocity condition that went further and required a non-
public utility transmission provider to offer its public utility transmission provider
transmission service comparable to what the public utility provider offers rather
than what the non-public utility provides itself. Order No. 1000 P 821, JA___.
FERC also rejected the public utility transmission providers’ contrasting argument
that FERC should use its power under FPA section 211A to require non-public
utility transmission providers to comply with FERC’s proposed planning mandates
and that its failure to do so was arbitrary. Id. P 815, JA___.
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STANDARD OF REVIEW
APA section 10(e) directs the Court to “hold unlawful and set aside agency
action, findings, and conclusions found to be—(A) arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law; [or] (C) in excess of
statutory jurisdiction.” 5 U.S.C. § 706(2). “To survive this review, FERC ‘must
“examine the relevant data and articulate a satisfactory explanation for its action
including a rational connection between the facts found and the choice made.”’”
PSEG Energy Res. & Trade LLC v. FERC, 665 F.3d 203, 208 (D.C. Cir. 2011)
(quoting PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194, 1198 (D.C. Cir.
2005) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983))). An agency’s action will be set aside “if the agency has relied
on factors which Congress has not intended it to consider’, entirely failed to
consider an important aspect of the problem, offered an explanation for its decision
that runs counter to the evidence before the agency, or is so implausible that it
could not be ascribed to a difference in view or the product of agency expertise.”
Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43. Agencies must apply their own
precedents consistently or reasonably explain any departures from those
precedents. FCC v. Fox Television Stations, 556 U.S. 502, 515 (2009).
“In reviewing FERC’s assertion of jurisdiction under the FPA and its
interpretation of a Commission-approved contract, the court applies the familiar
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two-step analysis under Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842-44
(1984).” Transmission Agency of N. Cal. v. FERC, 628 F.3d 538, 544 (D.C. Cir.
2010) (citations omitted). See also City of Arlington v. FCC, Nos. 11-1545 & 11-
1547, 2013 U.S. LEXIS 3838, *10 (U.S. May 20, 2013). The first step is to
determine “whether Congress has directly spoken to the precise question at issue.”
Transmission Agency of N. Cal. v. FERC, 495 F.3d 663, 673 (D.C. Cir. 2007)
(quoting Chevron, 467 U.S. at 842). “If the intent of Congress is clear, that is the
end of the matter; for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress.” Id. (quoting Chevron, 467 U.S. at
842-43). The analysis ends at Chevron Step 1 unless “the statute is silent or
ambiguous,” id., but an ambiguity exists “only when the devices of judicial
construction have been tried and found to yield no clear sense of congressional
intent,” Gen. Dynamics Land Sys. v. Cline, 540 U.S. 581, 600 (2004); see also
Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 983-84
(2005). There is no Step 2 analysis, moreover, where prior judicial decisions have
determined that an interpretation contrary to the agency’s “follows from the
unambiguous terms of the statute and thus leaves no room for agency discretion.”
Nat’l Cable, 545 U.S. at 982.
Under Chevron Step 2, the Court will “defer at step two to the agency’s
interpretation so long as the construction is a reasonable policy choice for the
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agency to make.” National Cable, 545 U.S. at 986 (internal quotation marks and
citations omitted). It will not defer when the agency’s decision “was not based on
[its] own judgment but rather on the unjustified assumption that it was Congress’
judgment that such [an outcome is] desirable or required.” PSEG Energy, 665
F.3d at 209 (citations omitted).
The APA and FPA each require that FERC’s finding be supported by
“substantial evidence.” 5 U.S.C. § 706(2) ; 16 U.S.C. § 825l(b). “Substantiality of
evidence must take into account whatever in the record fairly detracts from its
weight,” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951), such that an
agency must “explain why it rejected evidence that is contrary to its findings,”
Carpenters & Millwrights v. NLRB, 481 F.3d 804, 809 (D.C. Cir. 2007). Further,
“an administrative agency must respond to comments which, if true, . . . would
require a change in an agency’s proposed rule.” United Distrib. Cos. v. FERC, 88
F.3d 1105, 1169 (D.C. Cir. 1996) (internal citations omitted).
STANDING
The Petitioners and their supporting Intervenors include public utilities, non-
public utilities that are generally not subject to FERC jurisdiction (e.g., municipal
and cooperative utilities), business associations of public and non-public utilities,
and state regulatory commissions. The Orders on review inflicted a number of
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“concrete and particularized” injuries on the Petitioners and their supporting
Intervenors. E.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). These
injuries include, among other things, imposing mandatory planning requirements
that govern their daily business affairs,22 increasing their allocation of transmission
costs, abrogating rights created by FERC-approved contracts and recognized in
FERC-jurisdictional tariffs, and, in the case of the state commissions, usurping
their jurisdiction. The Orders on review are the direct cause of these injuries and
this Court can provide redress by setting the Orders aside. The Petitioners and
their supporting Intervenors have standing. See, e.g., id. at 560-61. Where, as
here, standing is beyond dispute for some petitioners, a court need not address each
petitioner’s standing individually. Military Toxics Project v EPA, 146 F.3d 948,
954 (D.C. Cir. 1998).
22 Order No. 1000 became effective on October 11, 2011. See Order No.
1000 P 836, JA___. Public utilities were required to submit their initial compliance filings in October 2012. See id. P 792, JA____.
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Respectfully submitted,
/s/ Harvey L. Reiter Harvey L. Reiter Email: hreiter@stinson.com Jonathan D. Schneider Email: jschneider@stinson.com Jonathan Peter Trotta Email: jtrotta@stinson.com STINSON MORRISON HECKLER LLP 1775 Pennsylvania Avenue, NW Suite 800 Washington, DC 20006 Telephone: (202) 785-9100 Counsel for Petitioners/Intervenors South Carolina Public Service Authority, the Large Public Power Council, and Sacramento Municipal Utility District
/s/ Andrew W. Tunnell Andrew W. Tunnell Email: atunnell@balch.com Ed R. Haden Email: ehaden@balch.com Scott B. Grover Email: sgrover@balch.com BALCH & BINGHAM LLP 1710 Sixth Avenue North Birmingham, Alabama 35203 Telephone: (205) 251-8100 Counsel for Petitioner/Intervenor Southern Company Services, Inc.
/s/ George Scott Morris George Scott Morris Email: scott.morris@psc.alabama.gov Luther Daniel Bentley, IV Email: luke.bentley@psc.alabama.gov ALABAMA PUBLIC SERVICE COMMISSION Suite 836 100 North Union Street Montgomery, AL 36104 Telephone: (334) 242-5200 Counsel for Petitioner/Intervenor Alabama Public Service Commission
/s/ Randolph Lee Elliott Randolph Lee Elliott Email: relliott@mbolaw.com MILLER, BALIS & O’NEIL, PC 1015 15th Street, NW 12th Floor Washington, DC 20005-2605 Telephone: (202) 296-2960 Counsel for Petitioners/Intervenors American Public Power Association and National Rural Electric Cooperative Association
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/s/ Sue Deliane Sheridan Sue Deliane Sheridan Email: suedsheridan@yahoo.com SHERIDAN ENERGY & ENVIRONMENTAL CONSULTING, LLC 1050 Thomas Jefferson Street, NW Suite 700 Washington, DC 20007 Telephone: (202) 298-3718 Counsel for Petitioner/Intervenor Coalition for Fair Transmission Policy /s/ Wendy N. Reed Wendy N. Reed Email: reed@wrightlaw.com Matthew J. Binette Email: binette@wrightlaw.com David S. Berman Email: berman@wrightlaw.com WRIGHT & TALISMAN, P.C. 1200 G Street, NW Suite 600 Washington, DC 20005-3802 Telephone: (202) 393-1200 Counsel for Petitioner/Intervenor Midwest ISO Transmission Owners /s/ Elias G. Farrah Elias G. Farrah Email: EFarrah@winston.com WINSTON & STRAWN LLP 1700 K Street, NW Washington, DC 20006-3817 Telephone: (202) 282-5503 Counsel for Intervenor New York Transmission Owners
/s/ Stephen Matthew Spina Stephen Matthew Spina Email: sspina@morganlewis.com John D. McGrane Email: jmcgrane@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004-2541 Telephone: (202) 739-3000 Edward Comer, Vice President, General Counsel and Corporate Secretary Email: ecomer@eei.org EDISON ELECTRIC INSTITUTE 701 Pennsylvania Avenue, NW Washington, DC 20004 Telephone: (202) 508-5000 Counsel for Petitioner/Intervenor Edison Electric Institute /s/ Howard Haswell Shafferman Howard Haswell Shafferman Email: hhs@ballardspahr.com Jack Nadim Semrani Email: semranij@ballardspahr.com BALLARD SPAHR LLP 1909 K Street, NW 12th Floor Washington, DC 20006-1157 Telephone: (202) 661-2200 Counsel for Petitioner New York Independent System Operator, Inc.
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/s/ John L. Shepherd, Jr. John L. Shepherd, Jr. Email: John.Shepherd@skadden.com William Rainey Barksdale Email: William.Barksdale@skadden.com Karis Anne Gong Email: Karis.Gong@skadden.com SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 1440 New York Avenue, NW Washington, DC 20005 Telephone: (202) 371-7000 Tamara L. Linde Email: Tamara.Linde@PSEG.com Jodi L. Moskowitz Email: Jodi.Moskowitz@PSEG.com PSEG SERVICES CORPORATION 80 Park Plaza, T5G Newark, NJ 07102-4194 Telephone: (973) 430-6409 Counsel for Petitioners/Intervenors PSEG Energy Resources & Trade LLC, PSEG Power LLC, Public Service Electric and Gas Company, Public Service Enterprise Group Inc.
/s/ Kenneth G. Jaffe Kenneth G. Jaffe Email: kenneth.jaffe@alston.com Michael E. Ward Email: michael.ward@alston.com ALSTON & BIRD LLP 950 F Street, NW Washington, DC 20004-1404 Telephone: (202) 756-3300 Randall Bruce Palmer, Esquire, Senior Counsel Email: rpalmer@firstenergycorp.com ALLEGHENY ENERGY, INC. 800 Cabin Hill Drive Greensburg, PA 15601-0000 Telephone: (724) 838-6894 Counsel for Petitioners/Intervenors American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, and West Penn Power Company
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/s/ Kenneth B. Driver Kenneth B. Driver Email: kbdriver@jonesday.com JONES DAY 51 Louisiana Ave. NW Washington, DC 20001 Telephone: (202) 879-7629 Counsel for Petitioner Oklahoma Gas and Electric Company /s/ Gary E. Guy Gary E. Guy Email: gary.e.guy@bge.com BALTIMORE GAS AND ELECTRIC
COMPANY 2 Center Plaza, 13th Floor 110 West Fayette Street Baltimore, MD 21201-0000 Telephone: (410) 470-1337 Jeanne Jackson Dworetzky, Assistant General Counsel Email: jeanne.dworetzky@exeloncorp.com EXELON CORPORATION 101 Constitution Avenue, NW Suite 400 East Washington, DC 20001 Telephone: (202) 347-7500
Counsel for Intervenor Exelon Corporation
/s/ Clare E. Kindall Clare E. Kindall Department Head – Energy Email: Clare.Kindall@ct.gov OFFICE OF THE ATTORNEY GENERAL Ten Franklin Square New Britain, CT 06051 Telephone: (860) 827-2683 Counsel for Intervenor Connecticut Public Utilities Regulatory Authority /s/ Cynthia B. Miller Cynthia B. Miller Associate General Counsel Email: cmiller@psc.state.fl.us FLORIDA PUBLIC SERVICE COMMISSION 2540 Shumard Oak Boulevard Tallahassee, FL 32399-0862 Telephone: (850) 413-6082 Counsel for Intervenor Florida Public Service Commission /s/ Matthew J. Binette Barry S. Spector Email: spector@wrightlaw.com Matthew J. Binette Email: binette@wrightlaw.com WRIGHT & TALISMAN, P.C. 1200 G Street, NW Suite 600 Washington, DC 20005-3802 Telephone: (202) 393-1200 Counsel for Intervenor Southwest Power Pool, Inc.
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/s/ Daniel M. Malabonga Daniel M. Malabonga Email: dmmalabonga@venable.com VENABLE LLP 575 7th Street, N.W. Washington, D.C. 20004 Telephone: (202) 344-4508 Stephen G. Kozey Vice-President, Secretary, and General Counsel Email: stevekozey@misoenergy.org Mathew R. Dorsett Attorney Email: mdorsett@misonergy.org MIDCONTINENT INDEPENDENT SYSTEM
OPERATOR, INC. P.O. Box 4202 Carmel, IN 46082-46032 Telephone: (317) 249-5431 Counsel for Intervenor Midcontinent Independent System Operator, Inc. /s/ N. Beth Emery N. Beth Emery Email: Beth.Emery@HuschBlackwell.com HUSCH BLACKWELL LLP 755 E. Mulberry Street, Suite 200 San Antonio, TX 78212 Telephone: (210) 244-8802 Counsel for Intervenors Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC
/s/ Daniel E. Frank Daniel E. Frank Email: daniel.frank@sutherland.com Jennifer J.K. Herbert Email: jj.herbert@sutherland.com SUTHERLAND ASBILL & BRENNAN LLP 700 Sixth Street, N.W., Suite 700 Washington, DC 20001-3980 Telephone: (202) 383-0100 Counsel for Western Farmers Electric Cooperative /s/ James Bradford Ramsay James Bradford Ramsay General Counsel Email: jramsay@naruc.org Holly Rachel Smith Assistant General Counsel Email: hsmith@naruc.org NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS* *(intervention pending) 1101 Vermont Ave., NW, Suite 200 Washington, DC 20005 Telephone: (202) 898-1350 Counsel for Intervenor National Association of Regulatory Utility Commissioners
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CERTIFICATE OF COMPLIANCE
Pursuant to Fed. R. App. P. 32(a)(7) and D.C. Cir. R. 32(a)(2), I hereby
certify that the textual portion of the foregoing brief (exclusive of tables of
contents and authorities, glossary, certificates of service and length, but including
footnotes) contains ____6,831_______ words as determined by the word-counting
feature of Microsoft Word.
Respectfully submitted, /s/ Andrew W. Tunnell Andrew W. Tunnell Counsel for Petitioner/Intervenor Southern Company Services, Inc. And on behalf of Petitioners and Intervenors South Carolina Public Service Authority, the Large Public Power Council, and Sacramento Municipal Utility District; Alabama Public Service Commission; American Public Power Association; Coalition for Fair Transmission Policy; Edison Electric Institute; Exelon Corporation; American Transmission Systems Incorporated, Cleveland Electric Illuminating Company, FirstEnergy Solutions Corp., Jersey Central Power & Light Company, Metropolitan Edison Company, Monongahela Power Company, Ohio Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, The Potomac Edison Company, Toledo Edison Company, Trans-Allegheny Interstate Line Company, and West Penn Power Company; Midwest ISO
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Transmission Owners; National Rural Electric Cooperative Association; New York Independent System Operator, Inc.; New York Transmission Owners, Central Hudson Gas & Electric Corporation, Consolidated Edison Company of New York, Inc., Long Island Power Authority, New York Power Authority, New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation d/b/a National Grid, Orange and Rockland Utilities, Inc., and Rochester Gas and Electric Corporation; Oklahoma Gas and Electric Company; PSEG Energy Resources & Trade LLC, PSEG Power LLC, Public Service Electric and Gas Company, Public Service Enterprise Group Inc.; Connecticut Public Utilities Regulatory Authority; Florida Public Service Commission; Midcontinent Independent System Operator, Inc.; Southwest Power Pool, Inc.; Sunflower Electric Power Corporation and Mid-Kansas Electric Company, LLC; Western Farmers Electric Cooperative; National Association of Regulatory Utility Commissioners (intervention pending)
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CERTIFICATE OF SERVICE
I hereby certify that, pursuant to D.C. Cir. R. 25(c), service of the foregoing
will be made electronically by the CM/ECF system. All participants in the case are
registered CM/ECF users and will be served by the appellate CM/ECF system.
Dated this 28th day of May, 2013.
/s/ Andrew W. Tunnell Of Counsel
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South Carolina Public Service Authority, et al. v. Federal Energy Regulatory Commission
Case Nos. 12-1232, 12-1233, 12-1250, 12-1276, 12-1279, 12-1280, 12-1285, 12-1292, 12-1293, 12-1296, 12-1299, 12-1300, 12-1304, 12-1448,
and 12-1478 (Consolidated)
TABLE OF CONTENTS
5 U.S.C. § 706 ..................................................................................................... A001 15 U.S.C. § 717f .................................................................................................. A003 16 U.S.C. § 824 (FPA § 201) ............................................................................. A006 16 U.S.C. § 824a (FPA § 202) ........................................................................... A008 16 U.S.C. § 824a-1 ............................................................................................ A011 16 U.S.C. § 824d (FPA § 205) ........................................................................... A012 16 U.S.C. § 824e (FPA § 206) ........................................................................... A014 16 U.S.C. § 824j-1 (FPA § 211A) ..................................................................... A017 16 U.S.C. § 824o (FPA § 215) ........................................................................... A019 16 U.S.C. § 824p (FPA § 216) ........................................................................... A023 16 U.S.C. § 824q (FPA § 217) ........................................................................... A027 16 U.S.C. § 825l (FPA § 313) ............................................................................ A029 18 C.F.R. § 39.2 ................................................................................................. A031 18 C.F.R. § 39.10 ................................................................................................ A033 CMEP 6.1 ............................................................................................................ A034
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